HB 

/9zi The Things 
That Are Caesar^s 

A Defence of Wealth 

By 
GUY MORRISON WALKER 

This volume was neither written nor published for 
profit, but solely in the public service and in the in- 
terest of sound economic thought in protection of the 
future of both labor and capital in the United States. 

"A race oppressed by hunger and cold gave 
little thought to the Immortality of the SouL" 

Measure of Civilization, pg. 21. 

"And they sent unto Him saying, 'Master, We know that 
Thou teachest the way of truth, neither carest Thou for any 
man. Tell us, therefore. Is it lawful to pay tribute unto 
Caesar?' " 

"Then said He unto them, * Render unto Caesar the things 
which are Caesar's.* " 

Third Edition 

A. U FOWLE, 61 BROADWAY, NEW YORK 
PUBLISHER . 

Price $1*00 



Other Books By 
GUY MORRISON WALKER 

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Measure of Civilization 

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Can We Escape War With Japan 

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The Things 
That Are Caesar's 

A Defence of Wealth 

By 
GUY MORRISON WALKER 

Author of "Measure of Civilization," "Railroads and 

Wages," "Railroad Rates and Rebates," 

"Trust Companies," etc. 



"A race oppressed by hunger and cold gave 
little thought to the Immortality of the Soul. " 

Measure of Civilization, pg. 21. 



"And they sent unto Him saying, ' Master, We know 
that Thou teachest the way of truth, neither carest 
Thou for any man. Tell us, therefore, Is it lawful 
to pay tribute unto Caesar?' " 

"Then said He unto them, 'Render unto Caesar the 
things which are Caesar's.' " 



Third Edition 

A. L. FOWLE, 61 BROADWAY, NEW YORK 
PUBLISHER 

1922 



OaA677896 



^.5^ 






AyG.l9iS22 



Copyright 

by 

GUY MORRISON WALKER 

1920-1922 

^Permission is granted to news- 
papers and periodicals to reprint the 
subject matter herein in whole or in 
part, but all rights to reprinting as 
a book are reserved.) 




THE NEED OF THE HOUR 

An Introduction 

By Clarence W. Barron 

To the Third Edition of "The Things That Are Caesar's" 

EN in democracy must understand the 
foundations of their country, or they and 
their country will perish. Destruction from 
within or without will follow ignorance. 

This book entitled 'The Things That Are Caesar's," 
by Guy Morrison Walker, is the clearest elementary 
presentation that has ever been written concerning 
the progress of the world and the uplift of Labor by 
Capital and its earnings and accumulations. 

England swept piracy from the seas, protecting 
human rights in trade and possessions so far as her 
naval arm could reach. 

Because of this protection, she became the financial 
centre of the world's trade ; and the world heaped gold 
upon her shores to go forth again and bring back food 
and clothing in infinite variety. 

The United States, with its freedom for individual 
human initiative and enterprise, spread for the first 
time safe transportation across a continent — a conti- 
nent wider than the Atlantic — created the greatest 
free trade area in the world and lifted human labor 
to a dignity never before dreamed. 

Then wealth in the United States for the first time 
made wealth not for display or fashion, but in a game 
of wealth creation, expanding mutual human service. 

Our country can grow greater and enlarge the bless- 
ings of wealth to the whole world only by protection 
of individual property rights and individual enter- 
prise. 



Economic insanity, denying individual property 
rights and repressing individual initiative and enter- 
prise, arises in Eastern Europe, destroying all govern- 
ment and social order, all safety for persons and prop- 
erty, all currency and credits. The seed corn is eaten, 
the machinery in production and transportation is con- 
sumed and famine and death reap in the fields. 

Ignorant millions fleeing oppression have spread 
social poison into the free industrial system of Amer- 
ica. Radicalism does not spring from viciousness ; it 
is created by ignorance. 

The antidote is education — economic education. 
The responsibility for this is with the business men of 
America. More quickly and practically than professor, 
pulpit or press they can spread the truth and show- 
that human progress rests upon man individually — his 
individual initiative and enterprise and his individual 
possessions. 

Our material progress has been so great that me- 
chanics, machinery and muscle now lay claim to 
universal rule and possession and deny that creation is 
a matter of mind. 

Above every other nation the United States has had 
goods abundant and cheap because of freedom in de- 
mocracy. 

But the materialism of the present age would seek 
to restrain this freedom, enslave the human unit and 
crush the individual mind ; its initiative and power. 

Go forth, ''The Things That Are Caesar's," and 
teach men that humanity is one and indivisible and 
goes forward only when brain and hand co-ordinate, 
each in its proper place, and produce the surplus 
above consumption that is called Capital and by which 
alone is material progress ! 
New York, Aug. 1, 1922. C. W. B. 




A FOREWORD 

By Charles A. Hazen 
Editor "The Banker and Financier" 

|HE writer had the privilege of reading Mr. 
Walker's book in manuscript, before publi- 
cation. He declared at that time, and 
wrote subsequently in a review of the First 
Edition, that "The Things That Are Caesar's" would 
prove to be in the economic world, an event as 
important as the discovery of a new natural law, or a 
new truth, in the world of science. 

He further made the assertion that the reasoning 
of Mr. Walker was so original, so strikingly in ad- 
vance of present-day thought, and so convincingly 
put forth, that the name of the author must be iden- 
tified with it as the expounder of a new school of 
economic truth. 

These things have come to pass. Issued privately, 
unheralded and unexploited, the first edition ran 
quickly into a second. Now comes the third printing 
within a period of two years. In fact, a fourth edi- 
tion is already in preparation. 

If ever there was substantiation of Emerson's dec- 
laration that the world would beat a path to the door- 
way of the man who had something better to offer, we 
have it here. 

Why is it that a book put forth so modestly is 
beginning to attract international attention? The 
answer is that its author is not afraid to tell the 
truth. Better yet, he tests the truth by every touch- 
stone before he utters it. His reasoning is as pure as 
mathematics. There is no successful refutation. 



To one picking up this volume casually it may seem 
to be an argument against Labor, as the word is 
usually understood. On the contrary, it is a plea for 
the uplift of Labor, if by the term we mean industry 
and honest effort. It scores professional labor domi- 
nation, crooked labor policies, and union labor tyranny. 

But it does not do this in the interest of Capital, as 
opposed to Labor. The problem to the author is 
abstract, impersonal. He reduces it to the concrete 
and evolves the answer. The application is un- 
escapable. Just as the deductions of true science often 
appear paradoxical, the conclusions of the author of 
this book are at times startling — perhaps unpleasant 
to not a few. That does not influence the truth. 
There are still people who regret, even though they 
fear, the continued promulgation of the Ten Com- 
mandments, or the Beatitudes. 

"What," asks Mr. Walker, *did poverty ever pro- 
duce?" What, indeed, but more povery and misery? 
What does ignorance ever produce? Inevitably and 
inexorably only more ignorance and woe. It is against 
them that he writes. 

You cannot get anywhere by concealing facts, by 
hiding truth. The author of this book scorns to do 
either. Do not read this volume, therefore, if you 
happen to be a "capitalist," with the idea that it was 
written to give you an unfair or selfish advantage, for 
this was not the intention. Do not read it, if per- 
chance your name or condition be identified with 
"labor," under a mistaken notion that it is an attack 
on you, for it is not. It is just truth without prejudice, 
except the prejudice that an honest man holds against 
error of every kind. 

The importance of this volume is only beginning to 



be appreciated. It is bound to exert a powerful influ- 
ence in the world of human endeavor. The Walker 
economic theory should be taught in all schools and 
colleges. Like all great revelations it is amazingly 
simple and comprehensible. It holds merely that he 
who performs the greater service is entitled to com- 
mensurate reward, and that having earned it, his 
possession is not to be disputed. As a corollary, no 
man serving civilization can obtain any reward what- 
soever without bestowing benefits in more abundant 
measure on his fellow man. The book teaches the 
exaltation of the Man who Thinks ; of the Doer ; for 
on them the future rests. This does not necessarily 
imply the worship of wealth. Rather it favors the 
production of wealth and its continued conservation, 
without either or both of which humanity must 
perish. Therefore, this book is a Message to Man, 
regardless of condition, creed or class, and with a 
moral so clearly expressed as to be understandable 
without further elucidation or interpretation. 

C. A. H. 






FOREWORD 

By The Author 

HE problem of Labor and its relation to 
wealth has baffled not only labor agita- 
tors and capitalists but political philoso- 
phers as well. 

Labor claims that it alone is responsible for the 
creation of wealth, yet the minute the great mass oi 
laborers rebel and break away from the control of 
their employers and the controllers of wealth, they 
engage in a mad orgy of destruction. They destroy 
not only the material prosperity which they claim 
has been created by their sole efforts but without dis- 
crimination they destroy monuments, art objects, in- 
stitutions and civilization itself, including the moral 
codes that have been built up thru thousands of years 
of effort to control and inhibit the savage instincts of 
the undeveloped, the ignorant, the vicious and the 
unthinking. 

In Russia, labor has challenged the civilization of 
the world and the apologists and advocates of 
Bolshevism, in the rest of the world and particularly 
here in our own country, have created a situation that 
demands that we search out and prove the economic 
and ethical foundations on which our civilization rests. 

The most fanatical supporter of the labor dogma 
will not pretend that the result in Russia has been to 
the advantage of the laborer. For with the destruc- 
tion of wealth and the wiping out of property has 
come a stoppage of production, the consumption of 
surpluses, hunger, starvation, famine, epidemic, and 
a reversion to savagery, with ruthless assassination 
and massacre, in an effort to secure possession of the 



women of other men, and of the remaining scraps of 
food that they possess. 

Still if wealth cannot justify its existence then the 
Bolshevik movement is entitled to support and the 
laborers of the rest of the world should join the 
movement and destroy all property that exists as an 
.^'-ev-idence of wealth. If on the other hand, wealth 
shall be able to justify itself and if it shall be shown 
that in the absence of wealth, labor starves and that 
only thru the creation of wealth and its conservation 
does labor escape hardship, then let us have an end 
of these attacks upon wealth and let labor submit to 
the direction and control of those who by their direc- 
tion and control of labor not only enable labor to 
secure more for itself than it otherwise would, but to 
pile up those great surpluses which we call wealth 
and which, when used to carry labor thru periods of 
idleness or times during which employment is impos- 
sible on account of physical conditions or to support 
labor thru the construction of projects, the completion 
of which extend over long periods of time, we term 
"Capital"; the use of which in the manner just de- 
scribed has made possible the so-called "Capitalistic 
Civilization," as we know it throughout the world 
today. 

The problems which the world professes to believe 
difficult of comprehension and impossible of solution, 
really become as simple as A B C if reduced to their 
early and primitive forms. 

The belief that in the face of death men dare not 
tell the untrue or utter the false has caused us for 
centuries to give to dying declarations a weight great- 
er even than to statements made under oath. These 
chapters have been written between successive opera- 



tions, and it has been a constant question whether I 
would be able to complete them. My condition has in 
fact compelled me to issue them in their present un- 
satisfactory state, but so far as I have been able to 
determine they contain nothing but the truth. Not 
the whole truth, for that I fear I shall not be given 
time to tell. 

G. M. W. 



CONTENTS 
I 

Chapter I Page 

THE BEGINNING OF WEALTH 1 

Primitive Man Produced Nothing 

Chapter II 

GROWTH OF WEALTH 4 

Why Should We Starve? 

Chapter III 

WHAT IS WEALTH? 13 

What One Man Has That Another Man Wants 

Chapter IV 

THE CREATORS OF WEALTH 23 

Not Labor But Brains 

Chapter V 

THE REWARD OF LABOR 46 

The Laborer is Worthy of His Hire but No More 

Chapter VI 

THE CRITICS OF WEALTH 73 

You Can't Eat It Up, Or Drink It Up, Without 
Killing Yourself 

Chapter VII 

THE AMERICAN ATTITUDE TOWARD 

WEALTH 91 

Can We Buy Peace by Paying Blackmail? 

Chapter VIII 

DESTROYERS OF WEALTH Ill 

Shall Those Who Choose Not to Work Be 
Permitted to Live By Plunder? 
Chapter IX 

PROGRAMME OF LABOR 124 

It Proposes Nothing Less Than a Reversion to 
Savagery 

Chapter X 

WEALTH OR NO WEALTH? 138 

What Did Poverty Ever Produce? 



Ine Imngs 
That Are Caesar's 



A Defence of Wealth 

Chapter I 
THE BEGINNING OF WEALTH 

Primitive Alan Produced Nothing 

WO men of the Stone Age, feeling the 
pangs of hunger, picked up their stone 
hammers or axes and started out in 
search of food. They had hunted so long 
in the region of their cave that they had destroyed 
most of the game that formerly roamed near their 
habitation, and they now found that they were com- 
pelled to go farther and farther before finding any- 
thing to eat. On this particular occasion they had 
travelled and hunted for two days without making 
any kill, when good fortune brought them across a 
doe with its fawn. Starting in pursuit they soon 
captured the fawn while the doe bounded away. In 
their crude savage way they divided the little beast 
between them and proceeded to satisfy their hunger 
by consuming all they could hold of the little animal, 

I 




A DEFENCE OF WEALTH 



Having finished their meal the younger of the two 
men dropped what remained of his half on the ground 
and went oft to a nearby stream to quench his thirst, 
but the older of the two with a memory of his two- 
day hunger still upon him could not bring himself to 
throw away what was left of his half, and looking 
over his head saw a fork in the tree under which he 
had been eating, and leaping high he dropped the 
remaining meat in the forked branches and followed 
his companion to the stream. 

As soon as he quitted the spot where he and his 
companion had fed, the hungry wolves rushed to the 
spot and quickly devoured the offal and the meat 
abandoned by the younger man, but leaping high 
in their efforts to reach the piece deposited in the fork 
of the tree by the older man they failed and soon 
abandoned their efforts. After sleeping the two men 
began again their pursuit of game and their search 
for food. But they found it extremely scarce and the 
second day afterward they found themselves again 
oppressed with the pangs of hunger. Then the older 
man remembering that he had deposited what was 
left of his half of the fawn in the fork of the tree, 
said : "Instead of hunting farther for fresh game I 
am going back to the food I left in the tree," and the 
younger man not knowing what else to do followed 
his elder. Hunger hurried their steps and it took but 
a day to get back to the spot from which they had 
spent two days in wandering. Arriving there the 
older man found his meat safe in the tree and leaping 
up he seized it and proceeded to satisfy his ravenous 
hunger. The younger man demanded his share but 



THE BEGINNING OF WEALTH 



the older man growled in reply that they had divided 
the fawn originally and that he had saved what was 
left of his half while the younger man had thrown 
away what was left of his. 

The skill and strength of the older man made it 
unwise for the younger man to attack the older one 
as he felt an instinct to do, and so he began to beg, 
saying to the older man, ''Give me half of the meat 
that you have saved and when my hunger is satisfied 
and my strength renewed I will go hunting and give 
you half of my next kill." But the older man ate on 
until finding his own hunger satisfied and some meat 
still remaining, said to the younger man, *'I will give 
you what is left here if you will give me half of your 
next kill even tho it be a grown deer or a buffalo." To 
this the hungry young man eagerly assented, where- 
upon the older man pushed over toward him the 
shoulder of the fawn with the meat remaining on it. 

The saving of the uneaten portion of the fawn was 
the beginning of wealth and the use of it to save the 
starving young man, the beginning of capitalism, 
while the hunting of the younger hunter to repay the 
debt he owed to the older who had fed him when he 
was starving was the beginning of the wage system. 



Chapter II 



GROWTH OF WEALTH 




Why Should We Starve f 

NOTHER cave man finding some fruit in 
the forest ate what he could and carried 
a branch laden with it back to his cave. 
Dropping it on the bare rocks in front of 
his cave, he found that the heat of the sun had 
withered the fruit, and though its taste was changed 
it was still palatable and remained so for days. This 
discovery enabled him to add dried fruit to his diet 
through the months when fruit did not grow and the 
trees v/ere bare. 

Another cave man found a strange grass standing 
though dead and yellow, and as he walked through it 
he noticed that the rattling heads shook open and 
scattered seeds about on the ground. Picking up a 
few he ale them and found them strangely nourishing. 
He gathered handsful of the standing stalks and beat 
the contents out of the heads against a rock. He 
gathered up the grains and carried them back to his 
cave, to supplement the dried meat and the dried fruit 
that he had already learned to preserve. 

Another primitive man found a strange looking 
rock and attempting to shape it into a stone imple- 
ment, he found that it yielded to the stroke and that 



THE GROWTH OF WEALTH 



under continuous hammering it grew flat and became 
a tool that gave him a considerable advantage over 
his fellows, who thereupon began to search for similar 
looking stones, that they might fashion for themselves 
similar instruments and put themselves on an equality 
with him. 

Most of these discoveries soon became known to 
others of the race, and the conditions of living for 
most of mankind became easier. Some instead of 
continuing to hunt for deer, and sheep, and goats, and 
buftalo, protected the herds and domesticated them 
and kept them near at hand to kill whenever they were 
wanted for food. 

The standard of living for the race steadily in- 
creased as first one man and then another learned 
how to get more out of the earth, whether it was from 
the game, or the flocks and herds, that fed on the 
lands, or whether it was the grains planted in the cul- 
tivated soil, or the metals that were dug from beneath 
the surface or melted out of the rocks. 

Now much of the earth's surface was unfit for 
human habitation under primitive conditions, and 
was therefore absolutely without value to the race 
until it had learned how to overcome the disadvantages 
of nature. Forests were of no use for man until some 
man invented an axe with which it was possible to 
chop down the trees. But the rude houses that primi- 
tive man built out of unhewn logs were a great waste 
of timber, though it made possible the cultivation of 
the land in which the trees had grown which was rich 
from hundreds of years of dropping leaves. 

But another man invented a saw and it became 



A DEFENCE OF WEALTH 



possible to build many houses out of the logs that 
had formerly been used to build one. And by locking 
the ends of these planks together, as you lock the 
fingers of one hand into the other, it was possible to 
mortise these planks into bins and receptacles for the 
saving of food. 

Only when you have seen the stone work of primi- 
tive man and have seen how by laborious rubbing of 
one stone upon another he made the edges lit, can you 
realize how much more it became possible for man 
to do when he discovered iron, and learned how to 
temper it, and could chisel a stone into form in a few 
hours, where it had formerly taken days and weeks 
to accomplish the same result. 

All of these discoveries and inventions inured to the 
benefit of such of the race as were able or willing to 
use them. Some men built houses and abandoned 
their caves, and as they cut down the forests they 
turned them into pastures and moved their flocks and 
herds into places of less danger. They cultivated the 
valleys and raised more grain than they could eat. 

They piled up surpluses of grain and increased the 
size of their flocks and herds. With food in storage 
some of these men began trying strange things. They 
found that they could make tools of better design 
and greater hardness and keener edges, than they had 
been able to make before. 

With their improved tools, their labors, both of 
farming and of mining and of lumbering, were mate- 
rially lightened, and their output in proportion to the 
physical effort involved was greatly increased. 

Because of the use of their improved tools which 



THE GROWTH OF WEALTH 



made possible the production of so much more from 
these lands with the same effort that they formerly- 
expended merely to secure a livelihood for themselves, 
their lands came to be considered desirable and 
whereas with their primitive tools they had been barely 
able to feed themselves by their utmost efforts, they 
were now, by these inventions and devices able with 
the same effort not only to feed themselves with ease 
but to produce enough to feed in the same manner at 
least a score of others. 

The surplus of every one willing to work increased, 
and as it increased, he exchanged part of his surplus 
for things devised by others that he thought would 
be useful to him, and sometimes for things that had 
no particular use but which seemed to him to be de- 
sirable. One bartered some of his surplus to others 
in exchange for their help in building himself a larger 
and stronger habitation and greater storehouses in 
which to keep his increasing surplus production, which 
was made possible by his use of the devices and in- 
ventions of other men, and of the strangely efficient 
tools and utensils that they produced. 

Some traded what they had for metal weapons and 
tools that they could carry easily and went on trips 
of adventure, returning to tell of wild men who had 
never seen metal weapons but who had so many skins 
of wild animals that it was no distinction to be dressed 
in furs. They told that these wild men were willing 
to trade all the fur that one could carry for a single 
metal spear-head. Others, who travelled in other 
directions, returned with cloths of weaves and colors 
that they had never seen before. 



A DEFENCE OF WEALTH 



Those who returned reported that in these distant 
places some products that were scarce and highly 
prized at home were strangely common, while other 
things which they regarded as common were very 
scarce and strangely prized. These reports caused 
men to question whether they had properly prized 
what they themselves had or whether they had not 
been willing- to trade over much for many things that 
were comparatively worthless. 

It was, however, impossible to get men to agree on 
what was more desirable. Some wanted one thing 
while others preferred another. Some cared for 
nothing but to nil their bellies and after gorging 
themselves refused to hunt or to work either for 
themselves or for anyone else until hunger compelled 
them. Others remembering their past experiences 
refused to gorge themselves but ate sparingly and 
carefully saved the rest. Some insisted that caves and 
tents were good enough for anybody, but others 
laboriously gathered together stones and built homes 
for themselves on spots of their own choosing instead 
of looking for a cave where they could find it. Some 
finding a cave that they desired already occupied 
would fight the occupant for its possession, while 
others claimed that it was foolish to run so great a 
risk as getting killed in a fight when you could build 
yourself a cave with no danger and with but little 
more effort. 

Some refused to plant grains and insisted that it 
was less effort to hunt for and gather the wild grains 
than it was to put so mu.h labor in cultivating a field. 

Others refused to waste their time in protecting a 



THE GROWTH OF WEALTH 



dcmescicated flock of sheep 'xvlien there were plenty of 
goats to be had by hunting a httle further away. They 
also insisted that the flavor of the wild meat was bet- 
ter, and they charged that the keepers of flocks were 
weak and cowardly and really kept the tame sheep 
because the}" were afraid of the dangers of the hunt. 

But as time rolled on it was noticed that the men, 
who kept the domesticated flocks and who spent their 
labor cultivating fruits and grains instead of hunting 
for them, ate more regularly, grew stronger, and mul- 
tiplied more rapidly, than did those who depended 
upon the chance of the chase or luck in hunting. 

What was more surprising was that while the 
cultivators of the soil and the keepers of the flocks 
multiplied rapidly, their flocks and stores of grain 
multiplied even more rapidly. On the other hand, 
while the hunters remained few, their supply of game 
steadily diminished and the wild fruits and wild grains 
became almost extinct. At last the returns of hunting 
became so scant that the hunt instead of being a sport 
became poorly rewarded labor. 

Finally a number of hunters exhausted with several 
days' hunting which had found them nothing, said to 
each other : "Why should we starve here when the 
keepers of the flocks in the valley have so many more 
sheep than they need? It is foolish for us to go hungry 
when sheep are to be had for the taking. For you 
know those domesticated sheep are so tame that they 
do not know enough to run away." 

That night a band of the hunters descended on the 
people in the plain and killed almost all of a flock of 
tame sheep belonging to one of the men in the valley 



10 A DEFENCE OF WEALTH 

and carried back with them into the forests all that 
they could carry of the dead meat. The next morning 
the owner of this flock called together the other keep- 
ers of flocks and showed them what the hunters had 
done. ''They will fall on one of you next and our only 
protection is to unite and send a punitive expedition 
against them, and either to drive them away or kill 
them oi¥. At any rate they must be taught that since 
they preferred to hunt wild sheep instead of doing the 
work of raising tame ones, they must respect the 
rights of those of us who have preferred to put in our 
time raising flocks and herds and fields of grain, in- 
stead of depending on the uncertain rewards of 
hunting." 

This suggestion seemed a wise one and gathering a 
considerable company of the cultivators of grain and 
keepers of flocks, they armed themselves with weapons 
which they had devised for protecting their flocks from 
wild animals, and with strange knives that had been 
modified from those that had been devised for the 
cutting of standing grain. 

When the hunters saw the plainsmen coming against 
them, they were filled with derision that these effemi- 
nate men could think that they had a chance in combat 
against men like themselves inured to the hardship 
of life in the forest and in the mountains. 

But when they came to close quarters the hunters 
found that the keepers of the flocks were able to kill 
them before they could even get close enough to strike 
back. For the plainsmen used new and strange 
weapons that the hunters had never seen before and 
against which they were defenseless. 



THE GROWTH OF WEALTH U 

It later became known that the men of the plain 
had raised such a surplus of food products that a 
number of them had been able to take their time and 
attention from the raising of grains and the protection 
of flocks and spend it in devising not only protectors 
against the primitive weapons of the hunters, but new 
weapons that would give them an advantage over those 
who used the old. 

The result of the fight was the almost total extinc* 
tion of the race of hunters. Those who were not killed, 
fled into the forests and were not seen nor heard of 
for a long time, while those who remained were 
captured by the men from the plains and compelled to 
work at the cultivation of fields and the tending of 
flocks for their masters, and while they found the 
labor irksome, they found that it had its compensa- 
tion. For they were able to feed regularly and lived 
in buildings that were far more comfortable than the 
caves and huts of the mountains and forests. 

The contrast between the conditions of life among 
the hunters and the men who cultivated the fields and 
domesticated the flocks were not the only contrasts. 
Even among the hunters, the man who was the more 
persistent hunter or the more skillful in stalking 
game, accumulated the largest supply of skins, and 
was clothed warmer and had a better bed. His family 
was better fed and his children grew stronger and 
more fearless, than did the children of the lazy or 
indifferent hunters who were always half starved, 
poorly covered, and never had more than a single 
skin to sleep upon. 

Naturally the hunter, who had the largest cave and 



12 A DEFENCE OF WEALTH 

the most skins, was envied by his fellow hunters, who 
declared that he was lucky in hunting and they always 
attributed their own lack of food and of skins to wear 
or to sleep upon to their bad luck. 

The same inequalities prevailed among the men of 
the plain. The man, who by industry and care in- 
creased his flocks and piled up greater stores of grain, 
built for himself larger storehouses and a larger house 
in which to keep his growing family. His children, 
and his children's children, being better fed and better 
housed, were more vigorous physically and intellect- 
ually than those who were not so well fed. They also 
had more time to think and so devised more economical 
and efficient ways of doing things. This still further 
increased their advantage over their fellows and 
enabled them to build protective places for themselves 
and their families and for their stores of grains, and 
their flocks and herds. And because of their greater 
industr}^ and their increased production and of their 
saving and storing away their surplus production, they 
were called by their neighbors, "rich," and the build- 
ings which they had built for themselves and their 
children, and the warehouses in which they stored 
their surplus grains and dressed skins, and cured 
meats, and their flocks, and their herds, were called 
"wealth." 




Chapter III 

WHAT IS WEALTH? 

What One Man Has That Another Man Wants 

RIMITIVE men had no difficulty in decid- 
ing what constituted wealth. Wealth 
among them was whatever one man had 
that another man wanted. It consisted of 
"ood, of skins, of an advantageously located cave, and 
later, the simple weapons for hunting and crude culti- 
vation, and the utensils and receptacles in which were 
stored and preserved food. 

In the days of Job, the chief idea of wealth consisted 
of flocks and herds ; in the days of the Roman Empire 
it was chiefly lands and slaves to work them and 
stocks of precious metals. 

It is not necessary to trace the progress of material 
civilization whereby the huts of primitive men have 
become the forty-story steel frame buildings of today, 
and the encampments of the early nomads have grown 
into great cities containing millions ; whereby the dried 
venison of the savage has been displaced by millions 
of carcasses in massive cold storage plants ; whereby 
the earthen jar of v/heat has been supplanted by great 
elevators, each of whose compartments contains a 
cargo for a trans-atlantic liner; whereby the torch 
has been extinguished in favor of a strange light that 

13 



14 A DEFENCE OF WEALTH 

is transmitted over wires, and the drum signals of 
the savage have given way to messages transmitted 
by an unknown force through the air and around the 
earth. 

Attempts to define wealth must always be considered 
in relation to the stage of material and intellectual 
development existing at the time the definition is 
attempted. 

Adam Smith, first of English economists to define 
wealth, capital, wages, and the principles under con- 
sideration, defined wealth as consisting "of gold, 
silver, lands, houses, and consumable goods of all 
kind." This definition you will notice is distinctly 
primitive, as it confines wealth to physical material 
things. 

John Stuart Mills, a later and more scientific 
thinker, declared : "Wealth consists of all material 
things produced by human effort." But this definition 
is frankly and plainly British in its character, but it 
introduces the element of human effort. 

A comparatively unknown English economist, 
Mongredien, says that : "Wealth consists of all those 
objects of human desire produced by human exertion." 

Mongredien is the first of economists to call atten- 
tion to the element of desire as separate from use or 
need. But all of these definitions seem deficient. 

The source of all wealth is the soil of this earth. 
And the method of wealth creation is the expenditure 
of human effort upon the surface of the earth, whether 
it be the raising of cattle for food and for hides, or 
the raising of sheep for food and for wool, or the 
raising of grains for food and for oils, or the raising 



WHAT IS WEALTH? 15 

of cotton and flax, and other fibrous plants for the 
manufacture of cloths of various kind, and for manu- 
factured uses, or the cultivation of those worms that 
spin the wondrous fibres that make silk, or the digging 
of clay to build houses with greater ease and facility 
than can be done with stone, or the digging of coal 
to vitrify those brick and make them impervious to 
moisture, or for warmth, or for transforming water 
into steam, or the digging of copper and iron, with 
their many uses, which have made possible what we 
know as modern civilization, or the digging of those 
scarcer and more ductile metals which we call precious, 
of which the race has made many strange uses. 

There is no other source of wealth than the surface 
of the earth itself, and no other means of its creation 
than the transformation of its contents or products 
by human effort into forms useful to and desired by 
mankind. 

But there is no value in the earth's surface except 
as it is used by man, and its value to man is possible 
only in one of two ways, either by men travelling or 
transporting themselves to the place where that par- 
ticular spot of the earth's surface lays, occupying it 
and there supporting themselves on what they can 
produ.' e upon it, or by a few of them going to the 
distant spot, wresting from it that which it has of use 
to mankind and carrying it back to where it can be 
used. This was true in primitive times and it is true 
today. 

Always the limitations of man's ability to transport 
himself to the place where food and other things were 
produced by the minimum effort, or to transport the 



16 A DEFENCE OF WEALTH 

products of luxurious climes to the place where man 
himself found conditions better suited to his own 
existence, have operated to determine the relative use 
or value of any part of the earth's surface to the race. 

No better illustration exists to show how the wealth 
of a community depends upon its accessibility and the 
use possible of its products, than the Province of 
Sze-Chuan in China. This province with an area of 
over two hundred thousand square miles, being slightly 
larger than all New England, New York, Pennsylvania 
and New Jersey, combined, occupies one of the richest 
plateaus on the earth. 

Its richness is shown by the fact that it supports 
with ease a population of seventy millions, and has 
within its borders many great and rich cities. With 
this enormous population it actually produces such a 
surplus of wheat that for several years past the price 
of wheat in this province has been only from ten to 
fifteen cents a bushel, averaging about twelve cents. 

Naturally the lands of this province used in the 
production of wheat are valued only in proportion to 
the value of the wheat produced on them. Most per- 
sons on reading this will demand at once to know how 
it is possible for wheat to sell anywhere in the world 
during the past three or four years for as little as 
tAvelve cents a bushel. But the answer is quite simple. 
The nearest point in this province to the sea is over 
twelve hundred miles up the Yangtze River from 
Shanghai, and between it and the lower reaches of the 
river, v/here navigation ends, are the famous gorges 
that make the province practically inaccessible. 

Only the most primitive methods of transportation 



WHA7 IS WEALTH? 17 

exist belween tlie province and the outside woild. Al- 
most its only products that are valuable enough to pay 
the expense of export under present conditions are its 
silks, some of the finer grades of fur, and vegetable 
wax. 

It actually cost last year $1.25 a bushel to transport 
wheat from the Province of Sze-Cliuan down to 
Shanghai, a distance averaging, say, fourteen or fifteen 
fhundred miles. So that the wheat that was worth only 
twelve cents a bushel in Sze-Chuan actually cost $1.37 
a bushel by the time it reached Shanghai. 

Now, if it were possible to build a railroad even from 
the head of navigation on the Yangtze River, up to 
and through the wheat raising regions of this province, 
so that th.f' wheat of Sze-Chuan could be brought doAvn 
to tide-water at a cost of fifteen cents a bushel, as is 
the wheat of Kansas and Nebraska, it would raise the 
price of wheat in Sze-Chuan from twelve cents a 
bushel to $1.25 a bushel. And the wealth of the 
province would be increased ten-fold, because its land 
would increase in value in proportion to the increased 
income received from the sale of its products. 

In the same way, Chinese coal has been produced 
for years by Chinese labor so that it could be bought 
at the mouth of the mines for twent3^-five or thirty 
cents a ton, but the absence of cheap methods of trans- 
portation and distribution, has made the mines practi- 
cally valueless because there was little use for the coal. 

Coal produced at Chinese mines at a cost not to ex- 
ceed twenty-five cents a ton was raised by the mere 
cost of transportation by primitive methods to eighteen 
or twenty dollars a ton by the time it reached Shanghai. 



18 A DEFENCE OF WEALTH 

From the fact that the inhabitants of this isolated 
province in China have maintained a practically sta- 
tionary condition of civilization for hundreds of years 
and have devised no means to remove from themselves 
the handicap of isolation and remoteness, it is plain 
that among their population at least the peculiar 
quality of brains, resourcefulness, or inventive genius, 
that is necessary to make their province accessible, and 
to make possible the marketing in other parts of the 
world of their surplus production, does not exist. 

If the income of its people is to be increased and 
their standard of living raised, and their wealth multi- 
plied, it must be by some man outside of the province 
and not directly interested in the increase of the wealth 
and income of its people. But is there anyone who 
will dare to say that that person, or group of persons, 
that supplies cheap modern transportation into and 
out of that proviu' e, even though they never expended 
an ounce of physical effort therein, has had and can 
have nothing to do with the creation of the increased 
wealth of the province and with the increased income 
and wages of its inhabitants? 

For thousands of years it was the practice of the 
Race to appropriate without compensation, the de- 
vices invented by individuals with unusual gifts, and 
as a result men with extraordinary gifts could little 
afford to exercise them. Men created only those things 
in which other men recognized their creative effort 
and in which they acknowledged their property rights. 

If an individual raised a sheep or a hog his fellows 
recognized that sheep or hog as belonging to him, but 
if he devised a loom or a spinning wheel, they appro- 



WHAT IS WEALTH? 19 

priated his idea without even a word of thanks. It 
was, therefore, more worth while for the individual to 
raise cattle and sheep and hogs or grains than it was 
to devise new tools, or machines, for human use. 

Now the reason for this was that the great mass of 
mankind is unable to conceive of property in any other 
than the physical sense, and as long as the mass of 
the race could only think property in physical terms, 
it of course conceived wealth only in physical terms 
and defined it only as having physical, visible and 
tangible attributes. 

It has taken thousands of years for even the intel- 
lectuals and speculative philosophers to be able to 
think of a mortgage or a lien as being property the 
same as farms or hogs. 

It has taken the world thousands of years to realize 
that it is just as wrong to rob a man of his ideas or 
devices as it was to steal from him his horse or the 
trees off of his land. 

This is not because there is any difference in the 
ownership of an idea or a device, and the ownership 
of lands and the things that grow on lands ; there is no 
difference in the moral quality of stealing a man's 
horse or of stealing a man's ideas and devices. It is 
simply that the human mind in its mass action has been, 
and is yet, unable to conceive of property in ideas be- 
cause so few of them ever had any ideas themselves, 
but they are quite certain of the moral wrong of 
stealing food, or household furniture, or clothes, for 
everybody has at one time or another lost some of 
these things or had some of them stolen from him. 

It was not until 150 years ago when the world for 



20 A DEFENCE OF WEALTH 

the first time began to realize the unique value of 
ideas, and to see the necessity of recognizing the 
property rights therein of those who had them, that 
we began the wonderful period of inventions that have 
made the past 150 years — years of greater progress in 
a physical and material way than all the thousands of 
years since the creation of the Race up to that time. 

With all the vast supply of human labor working 
constantly from the beginning of time down to the year 
1780, it had been able to accumulate only a surplus of 
production over consumption in all these thousands of 
years, that made the total wealth of the world at that 
time, -approximately, 100 billion dollars. 

Remember, that up to this time, mankind had denied 
proprietary or property rights in ideas and devices, 
and had recognised property rights only in physical 
things, produced by physical human labor. But at 
that time the Race for the first time began to recognize 
property rights of individuals in their ideas and their 
devices with the result that in the past 140 years, human 
intellect and human brains, have been so devoted to 
the devising of new things, new machinery, new 
methods, new uses, the discovery of new forces, the 
devoloping of the science of transportation as we now 
know it, and of the science of communication as it now 
exists, with the result that human physical labor, which 
has not so greatly increased over what it was 140 
years ago, supplemented, guided and for the first time 
directed by human brains, actively exercised in the 
science of production, has so enormously increased 
not only the per capita production of the individual, 
but the aggregate production of the whole Race, that 



WHAT IS WEALTH? 21 



the wealth of the world today is, approximately, 1,000 
billions of dollars. 

In other words, since the time when the race recog- 
nized the property rights of ideas and devices, and the 
productive value of intellectual effort, the wealth of 
the world has grown in 140 years to be ten times what 
it had grown to be from the beginning of the race up 
to the period when intellectual values were recog- 
nized. 

It is in this respect that the previous definitions of 
wealth are deficient, and it is plain that any scientifi- 
cally correct and ethically true definition of wealth 
must recognize and include this intellectual element 
that enters into wealth creation. 

The English School of Economic Thought has fol- 
lowed Adam Smith, and is still disposed to regard 
wealth as purely material, and to classify all labor 
or effort that does not result in a material output as 
non-productive. But the French and Italian Schools 
of Economic Thought have insisted that any intel- 
lectual effort or thought that adds to the use or value 
of the material thing must be classed as productive 
along with the physical effort necessary to produce 
the material thing. 

The German School of Economic Thought is more 
truly scientific in that, they declare that every service 
that is rationally sought by mankind must be regarded 
as productive and as doing its part in the production of 
wealth. 

For instance, the English School of Economic 
Thought has regarded the teaching of school, religious 
instruction, legal service and advice and medical atten- 



22 A DEFENCE OF WEALTH 

tion as non-productive. But really all of these are 
equally productive. The school teacher by imparting 
knowledge to the producer increases the producer's 
capacity to create the things that make wealth. The 
religious teacher inculcates those principles which lead 
not only to diligence, and consequently, increased pro- 
duction of wealth, but to thrift and the conservation of 
wealth. The medical man in protecting the health of 
the producer saves him from the periods that he would 
otherwise be a non-producfer, and materially prolongs 
the period during which he is a producer ; while the 
legal man by protecting the producer in the possession 
and enjoyment of what he produces encourages in- 
creased production. 

Wealth therefore consists of all those objects of 
human need, use or desire, devised by human genius 
and produced by human effort mental and physical. 




Chapter IV 

THE CREATORS OF WEALTH 
Not Labor hut Brains 

HE world has not been without great minds 
in the past, but Solon and Lycurgus, 
though great law-givers were unable to 
invent the steam engine. Socrates, Plato, 
and Contucius, were great in the realm of ethics and 
metaphysics but they were unable to conceive elec- 
tricity. Archimedes, Aristotle and Caesar, founded 
mechanics, logics and military engineering, but they 
were unable to invent the telegraph, the telephone or 
armor plate. Galileo, first conceived of our solar 
system, but he never dreamed of the mechanical de- 
vices of these times with which we measure the dis- 
tance and light of the stars and determine the metab 
that constitute their physical makeup. 

Social philosophers have ignored the most extraordi- 
nary thing that makes for human inequality, and that 
is, the diversity of ability and quality in the human 
mind. Hundreds of thousands of ordinary brains put 
to work on the identical problem can not solve it un- 
less the problem be one within the comprehension of 
any single one of those thousands of ordinary minds. 
And, if it is within the understanding and compre- 
hension of any one of those thousands of ordinary 

23 



24 A DEFENCE OF WEALTH 

minds, any one of them is just as good for the solving 
of that problem as the united eilorts of the hundreds 
of thousands. But if the problem be beyond the un- 
derstanding and comprehension of the ordinary mind it 
must wait for its solving for the rare appearance of 
one of those great minds of unique qualit}^, who is 
able to solve it and who it sometimes seems is born 
for the purpose of solving it. One who w^hen sent 
solves it for the benefit of the whole race. Those extra- 
ordinary brains constitute such a rare treasure for the 
world that when they appear the world should subsi- 
dize them and reduce their struggle for existence to a 
minimum so that these extraordinary brains can devote 
their whole energy to the intellectual effort of solving 
the heretofore unsolved problems of the race. 

With all the great minds that the world has had 
from the beginning of time, it labored along with only 
man-power and animal-power, until Watt discovered 
the expansive force of steam, and substituted steam- 
power for man-power. With all the great minds of 
the past, the world had to go along without steam loco- 
motion until the extraordinary brain of Stephenson 
began the annihilation of space that is now well nigh 
accomplished. With all the great minds of the past, 
the human race was only able to invent a written record 
for itself about 5,000 years ago, and so we know 
nothing of the history of the race for the hundreds of 
thousands of years thru which it struggled up until 
then. 

For nearl}'' 5,000 years, the only way its greatest and 
best minds were able to make such a record was to 
chisel a few inscriptions in clay or on the face of stone, 



THE CREATORS OF WEALTH 25 

or to laboriously transcribe them by hand on skins and 
barks. With the reproduction of books possible only 
by long-hand transcription, it was impossible for 
knowledge to become diffused or for education to be- 
come general. Not until Gutenberg and Faust adapted 
the Chinese art of printing to European alphabets was 
it possible for the carefully copied ideas of the w^orld's 
best minds to become generally distributed. 

With all the great minds that the world has pro- 
duced the race struggled along in physical darkness 
while fear and superstition peopled the night with 
demons and ghosts, until a Rockefeller made artificial 
light possible to the poorest being on earth, by the 
economical production and cheap and general distribu- 
tion of petroleum, which in its turn is now being super- 
seded in all civilized communities by electric lights, 
which are being constantly improved until it is now 
almost a scientific fact that they rival the light of 
day. 

With all the great minds of the past, the world 
never realized the necessity or possibility of a pure 
water supply or the epidemic infections due to water 
contamination that decimated cities and killed millions, 
until modern bacteriology was discovered. And this 
knowledge has not yet become the possession of two- 
thirds of the population of the earth, for the millions 
of people in Africa and in India and in China are still 
without pure water and suffer terribly from epidemics 
that are now no longer known in Europe and Amer- 
ica. Contagion and infection are so little under- 
stood that the populations of Egypt, India, China and 
the Philippines, absolutely refuse to recognize the 



26 A DEFENCE OF WEALTH 

attempts of modern administrators to enforce quaran- 
tine. 

When you consider the attitude of the best educated 
men toward labor from the beginning of the race until 
the middle of the 18th Century, it is not surprising 
that statesmen and historians regard wealth as purely 
material. 

Through all this long period the labor of the race 
plodded clumsily along, undirected by its men of extra- 
ordinary ability, for it was considered beneath the 
dignity of intellectuals to interest themselves in such 
material things as production or the creation of wealth. 

Until this time intellectual effort was therefore con- 
fined to the writing of religious works, theological 
speculations, histories, annals, and the production of 
poems. Until comparatively recent times it was con- 
sidered a gross prostitution of mental abilities for a 
man of education and brains to write a novel, or to 
record events of other than political or moral signifi- 
cance. 

The primitive attitude of the intellectual and edu- 
cated men toward labor and production is nowhere 
better exemplified than in the exaltation of formal 
literature by Chinese scholars and statesmen down to 
the overthrow of the Manchu Dynasty in 1911. 

Europe has but slightly broken away from its preju- 
dice against the participation in industrial production 
or trade of its educated men, and only the knowledge 
of the extraordinary rewards that have followed the 
exercise of intellectual effort in this direction in our 
country, has induced some to defy the prejudice 
against it that still exists throughout Europe. 



TH E CREATORS OF WEALTH 27 

Not until comparatively recent times has intellec- 
tual effort been directed toward industry, production, 
and the creation of what we recognize as wealth. It 
is barely 200 years since the first engine was devised 
as a toy, but it was not until 1780 that Watt devised 
the first real operative steam engine, began the revolu- 
tion in labor saving modern industry and inaugurated 
a new era of production and wealth creation. 

As we look back over the record of human accom- 
plishment from the beginning of human records up 
until 1780, we are not so much astonished at what the 
Race accomplished, as we are appalled by the prodigal 
waste of human energy and the reckless spending of 
human life in doing it. 

The "Pyramids" are a wonderful monument of hu- 
man labor but it is appalling to think of the expendi- 
ture of human energy and the waste of human lives 
expended in their creation. Every stone in those 
Pyramids was cut by human hands from the quarries, 
moved from their place to the site of the Pyramids by 
human labor, and raised to the place where they now 
rest by human energy. 

The ''Great Wall of China," remains one of the 
wonders of the world, but when you think that every 
one of its bricks was made by human hands, trans- 
ferred to its place by human labor, and that not one 
single labor-saving device such as we now know, was 
used in the erection of this monumental wonder, you 
cannot help but be oppressed by the thought of the 
millions who were driven to its erection. 

The same thing is true of the ''Canals of China," 
the canals and so-called "wells" or "tanks" of India, 



28 A DEFENCE OF WEALTH 

the enormous structures raised as temples to appease 
the angry gods, and this includes the wonderful 
cathedrals of Europe. 

This country of ours is the only one on the face of 
the earth unmarked and unmarred by any gigantic 
structure raised by undirected, unrewarded, human 
labor. 

In 1782, when the Independence of our country was 
recognized, two years after the invention of the steam 
engine by Watt, the entire wealth of the world was 
not over 100 billion dollars. This represented the 
entire unconsumed surplus created by the undirected 
labor of the race, from its beginning up to that time, 
and the values of the used lands of the earth based 
on their then use by the peoples of the earth. 

I do not intend to enter into a discussion of the in- 
crease in the standards of living, or the relative values 
of human life, now and 140 years ago. But I wish to 
call your attention to the fact that at that time there 
was practically no house on earth with glass windows ; 
that ventilation, sewerage, and pure water supply were 
unknown ; that education was within the reach of but 
few and was still entirely classical and religious in its 
character. That the largest ship in the world at that 
time (1782) was the then newly built English Battle- 
ship, the ''Victory," the flagship of the famous Lord 
Nelson, which measured 186 feet in length. The largest 
ship that sailed in trade between Europe and the 
American Colonies before our Revolution was 120 feet 
long, 34 feet beam, with a tonnage of about 600. 

The founders of our United States realized as had 
no other political thinkers in the world before, the 



THE CREATORS OF WEALTH 29 

value of men's brains in production. From the first, 
we have recognized to a degree unequalled by any 
other nation or people, the property rights of men in 
their inventions, devices, and ideas, while by our al- 
most immediate and universal use of such inventions, 
devices, and ideas we have made it worth while for 
our intellectuals, our men of brains and of genius, to 
devote themselves to that character of human effort, 
namely, intellectual, that has enabled labor in this 
country by seeking and accepting the aid, direction 
and leadership of our best brains, to reach a unit of 
per capita production that has never been dreamed of 
by the peoples of any other country in the world. 

I have called attention to the fact that the values 
of lands on the earth depend on their accessibility. 
This was w^ell known and recognized by the men who 
undertook the development of this country. 

The first ship not driven by human hands or the 
winds was Rumsey's steamboat that made a success- 
ful trial on the Potomac in 1782. The first successful 
steamboats of the world plowed our Western rivers, 
and within forty years, long before the first steamship 
crossed the Atlantic, were going far into our West, 
up the Missouri, the Arkansas and the Red rivers, 
making them more accessible and nearer in point of 
time to our Atlantic coast than was Europe. 

The first power loom was not invented until 1785 
and Avas not commercially successful until 1835. Until 
that time all our clothes were homespun and home 
woven. 

The first sewing machine was invented in 1830. 

Railways, which first supplemented and finally super- 



30 A DEFENCE OF WEALTH 

seded the canals and rivers, were not invented until 
1826. By making the remotest acres of our country 
accessible and their products easily marketable, our 
railways have done more to increase the wealth of 
our people than any other single instrument. 

The electric telegraph was not invented until 1835. 

The first power press was not invented until 1814, 
and it was not until 1845 that Hoe first invented the 
fast press which has made possible the modern diffu- 
sion of knowledge and news by our daily press. 

I remember in my boyhood in the Orient, seeing 
the native blacksmiths laboriously making nails, ham- 
mering each one by hand, and I was astonished to 
find that being wrought, they could not be driven into 
hard wood, but that they always had to have a hole 
drilled in the wood before the nail could be used. 
The first nail-making machine was invented by Reed 
in our United States in 1786, but it was not until forty 
years later that his device really came into general use, 
and that cut-iron-nails superseded the old hand-made- 
wrought-iron-nail. 

Adam Smith, the first political economist of Eng- 
land, uses the manufacture of pins as an illustration 
of the benefits of specialized labor. Within fifty years 
after he wrote his ''Wealth of Nations" the first pin- 
making machine was invented by Wright here in our 
United States (in 1824) and the specialized labor, so 
much admired by Adam Smith, went into the discard 
along with the political philosophies founded on his 
illustration. 

The first rolled iron beam for building construction 
was not made until 1855, and the first elevator, a slow- 



1h-E CREATORS OF WEALTH 31 

moving hydraulic one, was not invented until 1865. 

The first electric light did not glow until 1866, and 
then only in a laboratory. It was almost ten years 
later before it began to get into commercial use. 

The first steel ship was not built until 1870. This 
invention opened r>^w possibilities in world commerce, 
by enormously increasing the unit of freight in foreign 
commerce, and reducing the cost of world transporta- 
tion. 

The telephone was not invented until 1876. While 
submarines, wireless telegraphy, automobiles, gasoline 
motors, aeroplanes, X-ray, and wireless telephony, are 
practically all the inventions or developments of the 
past twenty years. 

While the value of lands depends upon their accessi- 
bility, their accessibility depends upon the railroad, 
or steamship transportation facilities available for the 
transportation of their products. 

The rewards of labor are dependent upon the market 
for the products of labor, and from the beginning of 
time until the invention of railroads and steamships, 
it took labor a day's work to transport a ton of its 
product only one mile away. But with the brains of 
the Race devoted to relieving labor from this enormous 
handicap in transporting its products to where they 
can be consumed ; our brains have devised methods of 
transportation that enable us now to transport the 
products of labor a ton-mile for one-three-hundredths 
of a day's work, and this has left to labor 299/300ths 
of what it used to spend in carrying to market the 
products of its labor. The saving to labor by the in- 
vention of transportation facilities alone has enabled 



32 A DEFENCE OF WEALTH 

the ordinary laboring man to double his per capita 
production. 

It is plain to be seen from the record, which is 
there for anyone to read who will, that it has not been 
human labor in the physical sense that has relieved 
itself of the original limitations imposed upon it by 
nature, but it has been by the thought and devices of 
extraordinary individuals, who have devoted them- 
selves to the task of saving their fellows from the bur- 
dens imposed upon them by nature. 

It has not been "labor" that has produced the wealth 
of the past 150 years but BRAINS. It is not labor 
in the physical sense that is producing the wealth to- 
day but BRAINS, and it never can be an3^thing but 
human intellect devoting itself to accelerating produc- 
tion and directing the less endowed members of the 
race in their labor that will produce the still greater 
wealth of the future. 

The literature of the past has had much to say about 
the conflict between Capital and Labor, but it is only 
lately that the peoples of the world have begun to 
realize that this element of brains is more important 
in the creation of wealth than is either labor or capital. 

Political economists have not yet discovered the 
value of brains in production and wealth creation, 
but today we have the astonishing spectacle of capital, 
which knows it has no brains, and labor which realizes 
its inability to direct itself, eagerly competing for the 
use of brains, and offering the possessors of this scarce 
article almost anything they demand to accept the 
management of capital or the direction of labor. 

Capital would generally be idle and waste away if 



THE CREATORS OF WEALTH 33 

it were not for the brains of some thinker who finds a 
better way to use it than it is being used. And labor 
would often be idle if it were not for this same thinker 
w^ho devises, invents and creates, undreamed-of oppor- 
tunities for labor. By holding before capital the 
greater profits and rewards in a new venture, the 
thinker secures the support of capital, which labor 
would not be able to secure for itself. 

Social economists claim that there is only one source 
of wealth — Labor. Political economists insist that in 
addition to Labor — Land and Capital — must be classi- 
fied as additional sources of wealth. But they both 
deny the economic value of that which is the greatest 
of all in the production of wealth — BRAINS. The 
ability to see the relation between cause and effect, the 
ability to see why labor expended in one way produces 
little, while labor expended in another way produces 
much. Why one crop is a failure on a piece of land 
while another crop produces prodigally. A farmer once 
was asked how much land a man needed in order to 
make a good living? And he replied, "If a fellow's 
got brains enough all he needs is enough land to stand 
on. 

If labor complains that it does not get what it is 
worth, it should reflect upon the fact that there is 
nothing cheaper than capital. If safety can be assured 
to capital, the use of it can be purchased for t\YO or 
three per cent. The great fortunes are made not by 
the possessors of capital but by men of brains, men 
who purchase the use of the capital for a small per 
cent, and use it with their brains to build up great in- 
dustries. Rockefeller was a great borrower. It is 



34 A DEFENCE OF WEALTH 

brains that make the difference between two and three 
per cent, and the profits that are made in modern busi- 
ness. The attack, therefore, upon the creation of 
wealth is primarily an attack upon brains, and it is 
just as well that we should recognize frankly the fact 
that the great mass of mediocrity is attempting to 
make it a crime for a man to have any sense. 

The President of Cornell University, in a recent 
Commencement Address said to his students : "To get 
and to have is the motto not only of the market but of 
the altar and of the hearth. We are coming to meas- 
ure man — man with his heart and mind and soul — in 
terms of mere acquisition and possessions. A waning 
Christianity and a waxing mammonism are the twin 
spectres of our age." It is strange to see such eco- 
nomic unsoundness coming from one who should hold 
a higher and a different ideal before his students. 

There are still those in this world who believe it a 
sin to have anything. They may be found stalking 
naked with their bodies smeared with ashes and their 
hair uncut in greasy wringlets everywhere throughout 
India, and some of their unwashed and unkempt dis- 
ciples may be found in all parts of the world. The 
idea was prevalent, even among people of our race, 
in the Middle Ages, and there were many who took 
the vows of poverty, but thanks to an enlightened con- 
science and a saner economic philosophy, our race at 
last has come to realize that man with his heart and 
his mind and his soul was not to spend his life like 
brute creatures in satisfying only the necessities for 
existence, but that it was his duty to do, to make, 
and to have, more than the individual needs for him- 
self. 



THE CREATORS OF WEALTH 35 

Do you think there would be any happiness in a 
world where you were barely able to find enough to 
keep alive and where you were constantly engaged in 
a struggle to satisfy the pangs of hunger? Only by 
producing more than he needs, does the individual 
create a surplus, and only by having more than his 
immediate necessities require can the individual secure 
the leisure that is necessary for contemplation and 
thought, for study, discovery and invention. 

Many have toiled in useless and purposeless tasks 
without creating wealth, and there is no greater eco- 
nomic crime than to spend useless toil on work that 
need never have been done. The greatest conservators 
in the world, and on the whole, the poorest compensat- 
ed and paid, are the Thinkers, those who study and 
scheme to devise ways and means of saving their fel- 
lowmen from useless work. 

The idea seems to prevail that when the leader or 
inventor or the resourceful manager of property by 
some device, or invention, or method, is able to increase 
the output of his product, or to reduce the amount of 
labor necessary to produce the same output, that he 
should divide this increased production among those 
whom he has directed in its production, but if the in- 
dividuals working under his direction do no more work 
than they did before, it is hard to see what part they 
have in the increased production, or why they should 
be given any share of the increase. Not unless there is 
something done by or delivered by the worker himself 
that contributes to or helps make the increase of pro- 
duction, or to decrease the amount of time necessary 
for the same production, can the worker or laborer 



36 A DEFENCE OF WEALTH 

maintain any claim to a share in the increased product. 
You might as well propose to pay the machine instead 
of the inventor of it. 

One of the first principles of economics is that con- 
sumption is limited but that production is unlimited. 
Let a demand for anything be created and the supply 
to satisfy that demand will increase at a steadily de- 
creasing cost. The demand of labor for higher wages 
has exactly the opposite effect from what labor de- 
sires. Labor seems to think that the high wage that 
it receives is conducive to prosperity, but the truth is, 
that as costs rise consumption falls, factories cannot 
sell their products, employment becomes limited and 
wages either fall in order to decrease the cost of pro- 
duction and stimulate consumption, or else the fac- 
tories close down entirely and wages cease altogether. 

The extraordinary demands for coal due to the 
exigencies of the war were made the excuse on the 
part of the miners to impose upon the country the most 
preposterous wage scale ever heard of. But was the 
prosperity which came to the miners due in any wise 
to anything that the miners themselves had done or 
proposed or brought about? Manifestly, no! And the 
high wages instead of causing more coal to be pro- 
duced, had the directly opposite result. 

A prominent divine recently declared that: "One- 
half of the wealth of the United States is controlled 
by about one per cent, of the American people, and that 
is unjust." He further said that: "There is a just 
discontent among the people with the present order of 
things and that the country's great wealth should be 
distributed more among the many that contributed to 



THE CREATORS OF WEALTH 37 

make it." Then he concludes, *'This is the question 
that must be settled by the intelligent men of the 
country." 

This last phrase of the Doctor's is the crux of the 
whole problem. Why is the accumulated wealth of 
the country in the hands of a comparative few? It is 
because there are comparatively few of all men born, 
who are able or willing to control their appetites and 
their spendings. There are few who appreciate the 
need of saving. There are few who realize what can 
be done with the accumulations of thrift and saving. 

The schools and colleges of our country are open to 
all, but there are only a minority of our youth who 
ever finish the public schools. A still smaller minority 
who ever go to high school and only about one-fifth 
of one per cent, who ever attend a college, while the 
percentage of those who actually finish their courses 
is negligible. Is it unjust that the knowledge and edu- 
cation of the country should be confined to the less 
than one-tenth of one per cent, who have graduated 
from our colleges? Are they to be condemned be- 
cause through years of sacrifice and persistence they 
have pursued the acquisition of knowledge and the 
search for truth, and if they have spent these years in 
study and in learning how to do things better than 
their uneducated fellows, are they to be condemned 
because of their greater perception, their greater skill, 
or their greater facility ? 

And if, as the Doctor says, the question is to be 
settled by the intelligent men of the country, who will 
constitute the body to whom the decision is to be left, 
the 99 million, 9 hundred thousand, who refuse to 



38 A DEFENCE OF WEALTH 

persevere in getting an education, or in the practice of 
thrift, and long hours, or the 100 thousand, who have 
devoted their days and nights to study and to v^ork 
to accumulate knowledge and experience, and to the 
saving not only of what they have made themselves, 
but of some of that which their ignorant fellows have 
attempted to waste or to throw away? Two of the 
largest fortunes of my own knowledge have been made 
out of garbage ! 

Nature has not endowed all men equally, and it is 
natural that those with a smaller endowment being the 
more numerous, should attempt in some way to handi- 
cap those with brighter minds and greater persistence 
or disposition to stick to the tasks that they undertake 
until they finish them. The world is made up of those 
who do things and those who try to prevent them from 
doing them. The attitude of those who are doing 
things is usually that of ignoring the others, until 
their activities impinge upon the plans of the doers, 
then they take only sufficient notice thereof to devise 
a way of getting around the obstruction and proceed 
with their work. 

I remember discussing this matter once with the 
Editor of the Chautauqua Magazine. He had declared 
himself in favor of certain proposed social legislation, 
and was insisting that laws should be passed prohibit- 
ing the doing of a dozen different things that he claimed 
exploited the workman. In his tirade he said that he 
could not understand why the great users of labor did 
not recognize the situation and take some action. 

I replied that the men in the world who were doing 
things were too busy with their work to pay any atten- 



THE CREATORS OF WEALTH 39 

tion to the barking of the non-doers ; that only when 
the non-doers came up to the doer and said to him 
you cannot any longer do so and so, did he take any 
notice of them, and then only for the purpose of 
stamping out the thing which they had devised to 
handicap him. I said that I would give him three 
months to devise any law that he could think of to 
prevent my doing what I had to do in the ordinary 
course of business, and that I would undertake in 
thirty minutes to find a way of circumventing his law. 
He thought that I had little opinion of his ability. 
But it is not a question of the amount of ability but of 
the kind of ability. A m.an who is in the habit of doing 
things quickly sees how to do the same thing in another 
way when he comes up against an obstacle, while the 
fellow who is not in the habit of doing anything but 
whose habit of mind is critical and destructive, never 
can see how a thing can be done, sufficiently to prevent 
it from being done. 

I remember once dropping into the office of Mr. 
Dodd, the famous solicitor of the Standard Oil Com- 
pany. I found him sitting at his desk, tipped back in 
his office chair, his feet up on his desk, while he gazed 
out of his window over the Bay. He seemed to be 
thinking, so I started to back out of the door, when he, 
glancing over his shoulder, motioned to me to come in. 
I walked slowly across the room from the door to his 
desk, then Mr. Dodd spoke, saying: "I was sitting 
once, just as you found me now, when Mr. Rockefeller 
opened the door as you did. Glancing in and finding 
me in this attitude, he stepped noiselessly across the 
room to the back of my desk, placing his elbows on 



40 A DEFENCE OF WEALTH 

the desk he leaned over toward me, and said in a 
hoarse whisper, 'Dodd, is this what I pay you for?' 
Without changing my position, I looked up at Mr. 
Rockefeller and replied: 'Did you think you paid me 
for Avorking?' Every time I attempt to leave for a 
vacation, the evening of the first day finds at least a 
score of telegrams from you, saying, 'Dodd, what 
about this? Dodd, what about that? Dodd, come 
back quick.' If I do the thinking for the rest of you, 
I am doing all that can be expected of me." 

A New York paper some time ago pretended to 
show how the one-hundred-time millionaire was made. 
It started its description with declaring that there was 
a small nail mill with only $75,000 cash capital put in 
but it made money and made so many nails and sold 
so many nails and turned its capital over so many 
times in a year, that somebody came along in a few 
years and paid them one million, two hundred thou- 
sand dollars for the little wire nail factory that had had 
only $75,000 invested to begin with, and the Editor 
declared that this constituted watering the stock. Now 
there were a number of other nail mills, which the Edi- 
tor did not mention, that had more than a hundred 
thousand dollars invested in them and which never 
made a dollar, and which were abandoned and rusted 
away or were dismantled and were mostly or entirely 
lost. 

The two mills had exactly the same opportunity, 
they had bought the same kind of machinery, they 
used the same material and they had the same market, 
but there was no buyer for one, while a million two 
hundred thousand dollars was paid for the other. This 



THE CREATORS OF WEALTH 41 

was not because of any water, you could have pumped 
as much into one as into the other. It was because one 
mill had $75,000 plus brains and industry, and in the 
other instance it was one hundred thousand dollars 
minus brains and industry. 

The same paper in attacking the United States Steel 
Corporation, deliberately misrepresented the facts so 
persistently that it is difficult to discuss its state- 
ments without heat. It said that Mr. Carnegie was 
willing to sell his entire steel business for $100,000,000. 
This happens to be true. But it then stated that, the 
option falling' through that Mr. Morgan offered to pay 
Mr. Carnegie $300,000,000 in 5 per cent, bonds, and that 
because of this watering of the Carnegie holding in 
steel, the people of this countr}- must continue to pay 
$15,000,000 a year to Carnegie and his heirs forever. 

Now this second statement deliberately implies that 
the people of this country were not paying Mr. Car- 
negie anything at the time he was willing to sell for 
$100,000,000, but the truth was that Mr. Carnegie was 
and had been for some time getting a profit of more 
than $15,000,000 a year out of his steel business, but 
because of competition and the danger of over-produc- 
tion, the business was more or less hazardous so Mr. 
Carnegie was entirely willing to sell his holdings in the 
steel business on a 15 per cent, basis. But those who 
knew Mr. Carnegie very naturally believed that if he 
had $100,000,000 in cash he would probably go back 
in the steel business, as it was the only business he 
knew, and it was that fear that made that proposition 
fail. It was then that Mr. Morgan conceived the idea 
of getting Mr. Carnegie to retire by giving him securi- 



42 A DEFENCE OF WEALTH 

ties, the income on which would assure him $15,000,- 
000 a year, the same as he had been getting out of the 
business before, with the distinct understanding that 
Mr. Carnegie would retire and would not re-engage in 
the steel business. The facts are that Mr. Carnegie 
had been getting $15,000,000 a year out of the busi- 
ness for years, but the $15,000,000 had not been capi- 
talized. Instead of the United States Steel Corpora- 
tion imposing one dollar of additional tribute upon the 
users of steel in the United States, it merely assured to 
Mr. Carnegie upon his retiring the same income that 
he had been getting for years. 

Up to the time of the organization of the Steel 
Corporation, a steel company was compelled to figure 
ten or fifteen per cent, on the cost for selling. Even 
the Carnegie Steel Companies found their selling ex- 
penses slightly in excess of eight per cent, of the cost 
of the goods themselves. But the economies in selling 
and distribution introduced by the consolidation of the 
companies that made up the United States Steel Cor- 
poration reduced the cost of selling the manufactured 
product from over eight per cent, of the cost to less 
than one per cent. 

It has been charged that Andrew Carnegie gave the 
world nothing in return for the $250,000,000 of bonds 
given him for his development of the steel business, 
but the truth is that when Carnegie began the develop- 
ment of the steel business, iron rails were selling in 
this country for $130 a ton, and most of them were 
imported from England at that price. When Carnegie 
retired from the steel business he had reduced the cost 
of rails from $130 per ton for iron rails, to $22 a ton 



THE CREATORS OF WEALTH 43 

for steel rails. During this period, approximately 
200,000 miles of railroad were built in the United 
States. The saving in the cost of construction of these 
railroads in steel alone, brought about by Mr. Car- 
negie's efficiency, was over $2,500,000,000. In other 
words, the fortune that Mr. Carnegie made out of the 
development of the steel business was only about ten 
per cent, of the saving that he made for the railroads 
built in America in that time. Had it not been for his 
energy and foresight the people of the United States, 
instead of paying interest to him on $250,000,000, 
would be compelled to pay interest on the additional 
$2,500,000,000 that their railroads would have cost. 

The essence of Socialism and of the Labor dogma is 
to deny the unequal gift of brains or ability to indi- 
viduals, and to demand the assassination of the indi- 
vidual with unusual gifts, if and when he appears, as 
a danger or a menace to the mediocre ability and 
brains of the common mass. This has been and is a 
feature of the Soviet government in Russia, which has 
frankly declared war on all so-called "intellectuals" 
and has hunted out and exterminated all the educated 
men and women that it could find. But it is easy to 
see where this will lead for the mass, which has always 
profited by and benefited by the inventions of the 
brains and ability of these extraordinarily gifted indi- 
viduals. 

Denying the rights of individuals to possess extra- 
ordinary gifts. Socialism refuses to inventors any 
rights in their devices that would give them any re- 
ward over others. If they should succeed in their 
propaganda, inventors, or those with the ability to 



44 A DEFENCE OF WEALTH 

invent, knowing that the mediocre mass would appro- 
priate their discoveries and that they would get noth- 
ing more out of them than would the veriest lout who 
never had a thought, would refuse to exercise their 
extraordinary gifts. They would stop trying to think 
and would cease to invent, and the world would be 
the loser. The essential weakness of Socialism is that 
in destroying the incentive for improvement and prog- 
ress, it destroys the possibility of improving the con- 
ditions of the ignorant and mediocre and that in its 
efforts to cheat extraordinary ability out of a fair 
compensation, it robs itself of all benefit that it would 
derive from the exercise of the gifts of its most intelli- 
gent individuals. 

The fact that we now get our news from Europe 
in an hour instead of ten days is due in no wise to any 
effort or thing done on the part of the mediocre mass 
in the world, but was due solely and entirely to the 
vision, the genius and the work of Cyrus W. Field, 
who lost his entire fortune in an effort to furnish the 
people with a service that they ridiculed. 

The fact that we are now talking without the med- 
ium of wires but may actually telephone to our friends 
through the air, is due in no wise to anything that the 
mass of people did, not even to the genius of Marconi 
alone, but is due to the fact that a ''soulless corpora- 
tion" in the possession of enormous capital was di- 
rected by men who were able to see the possibilities 
of Marconi's invention, which as yet was undemon- 
strated from a practical or commercial point of view. 

Remember, it is always the individual who is the 
pioneer and who blazes the way for the multitude. All 



THE CREATORS OF WEALTH 45 

progress has been through these individuals, who have 
had the vision to look through the time-killing methods 
of their day and the courage to break with conven- 
tionality and precedent, and to use their newly dis- 
covered ways and methods. Only by the preservation 
and encouragement of individual initiative is the germ 
of progress kept alive or induced to flourish. Kill 
individual initiative and all progress will cease and 
civilization die. 

To teach men that the ignorant are as good judges 
as the educated or that the ordinary and mediocre are 
as efficient and useful as the extraordinary, is cruel 
because it is so utterly false. 




Chapter V 

THE REWARD OF LABOR 
The Laborer is Worthy of His Hire — But No More 

HE incompetence and improvidence of the 

so-called "laboring classes" has never been 

better described than it was by the late 

David Graham Phillips, who certainly 

was no friend of capital. 

Phillips said : "The art of living is divided into two 
totally separate and independent parts. The first, the 
one usually regarded as the whole of the art, is how to 
get an income ; but the second, which consists of know- 
ing how to use the income, is totally ignored." 

He said : "As you descend the scale of income, the 
conditions of ignorance, carelessness, and folly, in 
spending increase and their consequences become ap- 
palling!" Beginning with the foundation of living, 
Shelter, he says that : "The better class of tenants who 
do not damage property, who pay promptly and remain 
for long periods, are able to get their housing on a 
basis of 8 per cent, on the sum invested in housing 
them, but the poorer tenants living on the verge of 
ruin are reckless and indifferent, often destructive and 
troublesome, irregular and uncertain, and landlords 
must have additional compensation for dealing with 
such disagreeable tenants. The result is that this class 

46 



THE REWARD OF LABOR 47 

of the poor is compelled to pay for their housing a 
sum equal to 20 per cent, of the amount necessary to 
invest in housing them." 

He then takes up the question of Clothing, and says 
that : "The investment in good clothes, that is, good 
from the point of service, calls for more money than 
the average poor family has at any one time. If," 
he says, "the poor only knew they would contrive 
somehow to make the tremedous sacrifices necessary 
to the getting of good quality in their clothes. It is 
well known that the trade of the poor is enormously 
lucrative. Goods for them are made to catch the eye, 
the untrained eye, which is unable to distinguish 
shoddy from real quality : no substance, no warmth, 
no durability. From shoes and stockings to hats, 
everything made to sell to the poor, is rotten with 
sham and shoddy, for the shopkeeper like the landlord 
feels that he must have huge profits to compensate 
him for dealing with such customers." 

And next, the item of Food. "To spend an hour in 
a grocery store or meat shop in the poorer quarter of 
any city and watch the women and children buy is to 
have the heart wrung. Oh, the penalties of ignorance, 
the dollar so hardly earned — wasted, or worse than 
wasted ! The poor as a rule prefer the kinds of meat 
that are least nourishing and hardest to digest. The 
poor do not buy in quantity and so the prices are 
nominally small but actually enormous. They do not 
buy flour for they have neither time nor place to make 
bread, and do not know how if they did. They do 
not even buy meat when they can avoid it, for they 
have no facilities for cooking it, and the delicatessen 



48 A DEFENCE OF WEALTH 

shop tempts them with its cooked meats at prices that 
seem low. They buy coffee ah-eady ground at a price 
one-third to one-half more than if they would buy it 
unground and grind it themselves. The poor do not 
know the thousand tricks of the seller and dealer. 
Lacking all facility for storing and preparing food 
much of what they buy is spoilt and wasted ; and finally 
the item of Fuel." 

"The poor do not buy by the ton or even by the 
half-ton, but by the bag, the bushel, the pail, and 
thinking to be economical they buy the very poorest 
quality of coal and pay the small dealer, who delivers 
it to them by the bag or pail, at a rate that is often 
as much as 300 per cent, above the ton price." 

This is a distressing picture, but it is worthy of 
notice that the whole penalty of poverty, to which 
Phillips calls attention, is due to the woeful ignorance 
of the individuals, who suffer so as the result of their 
ignorance, and that in nothing that they do in wast- 
ing their mone}^ do the rich or the near-rich profit. 

The common statement made by those who attack 
w^ealth that the rich have accumulated their wealth by 
robbing the poor, is not and never has been true. 
The poor never produce as much as they consume. 
That is the reason they are poor and have nothing of 
which to be robbed. While wealth is the surplus pro- 
duct of production over and above consumption. 

The incompetence of labor is well illustrated by the 
folloAving story, told by President Branson of the 
Georgia State Normal School : 

"Near the school was a tenant farmer, a good man, 
industrious, law-abiding, and intensely religious. A 



THE REWARD OE LABOR 49 

tenant farmer, who had lived for 3''ears and 3'ears upon 
the same farm, which happened to belong- to a Dutch 
Land Company that w^as desirous of closing out its 
business in the State of Georgia. The}^ oitered the 
farm to the tenant on a ten-year loan at six per cent., 
and although his sons and his neighbors begged and 
pleaded with him to buy this farm on which he had 
lived so long, upon these easy terms, he absolutely re- 
fused to consider the proposition. His sons then per- 
su.aded a Macon business man to bu}- the farm from 
the Dutch Company on the same terms offered to their 
father in order that they and their family might con- 
tinue to live on the place. The Macon business man 
paid the first payment, one-tenth of the purchase price 
out of his business, while the farmer and his sons 
continued to pay the rent of the farm as before, with 
the result that at the end of ten years the tenant 
by his payment of the rent for that year enabled the 
Ma. on business man to pay the last payment on the 
farm to the Dutch Compan}^ The Macon business 
man nov\^ ovv^ns the farm, every dollar of the purchase 
price of which has been paid to him by the tenant- 
farmer as rent for living on it. Without knowing it 
this tenant-farmer has paid for the land, which the 
Macon business man owns, shnply because he lacked 
the foresight and initiative of ordinary intelligence." 

Some men have imagination, vision, initiative, dar- 
ing, executive ability, call it what you w^ill, but it is 
that Avhich leads them to dare and to do. while the 
great mass of men refuse to do anything unless some- 
body else takes the responsibility for it. The greatest 
and oldest game in the world is "Passing the buck.'' 



50 A DEFENCE OF WEALTH 

Wherever you go you will find two classes of people, 
those who are serving and those who are being served. 
There is just one reason for the difference between 
the two classes. Those who are being served either 
have themselves been thrifty and saved something, or 
they have had someone before them who has been 
thrifty and saved something, while those who serve 
have never saved anything nor had anyone to do it for 
them. 

If the five per cent, of our people who have accumu- 
lated and were the possessors of most of the wealth 
in this country had not saved their surplus and in this 
manner piled up the wealth that made it possible for 
us to spend and lend forty billion dollars in winning 
the war, our whole population would have been en- 
slaved, and most if not all of the laborers who are now 
condemning wealth would be engaged in involuntary 
and unpaid work for the German armies. It is a ser- 
ious question whether thrift can be nourished and 
further wealth accumulated for the protection of the 
race unless the thrifty and the industrious are relieved 
from the taxation, forced upon them by the demands of 
labor, which has destroyed the many little fortunes 
and competencies which our previous American policy 
has encouraged as an evidence of good citizenship. 

The injustice and uneconomic character of the 
attacks upon wealth have been proven by the fact that 
sincqwe entered the war, the salvation of our country, 
depending upon making the best use of the wealth 
of the country and of the things created by and repre- 
senting that wealth, has required of the Govern- 
ment the suspension of practically every law that it 



THE REWARD OF LABOR 51 

had previously passed, imposing these unjust and un- 
economic burdens upon wealth. It is doubtful if the 
war could have been won if the administration had 
been compelled to observe the laws for the regulation 
of wealth that it had passed for the purpose of penal- 
izing and plundering the private owners of wealth. 

An evening paper, in a recent editorial, works up a 
tremendous amount of indignation over the fact that 
the net profits of the packing business for the three 
years of 1915-1916-1917 were 121 millions more than 
they were for the three years of 1912-1913-1914, and 
declaims against the cruel process by which the meat 
packers have in three years taken 121 million dollars 
extra toll from the pressing needs of the nation and 
people. But this extra toll, which it denounces as 
criminal, amounts to only 40 million dollars a year, 
and is a bagatelle compared to the 800 million dollars 
wrung from the pressing needs of the nation and of 
our whole people by the labor union Railroad Em- 
ployees, who in addition to wringing this enormous 
sum from the pressing needs of the nation and people 
are giving them a rotten and inefficient service in re- 
turn, a thing which cannot be charged against the 
operators of the meat packing business. 

How much longer are our people going to stand for 
the demagoguery and deceit that are being practiced 
upon them? 

It is time to realize that there is no double standard 
of morals in Government any more than there is in 
personal relations ! If a practice is morally wrong 
when indulged in by individuals, it is morally wrong 
when indulged in by the Government itself, and if the 



52 A DEFENCE OF WEALTH 

Government to save its existence is compelled to adopt 
certain practices and to use certain devices, and finds 
that in so doing there is no moral turpitude, it cannot 
impute moral turpitude and criminality to individuals 
who follow the same practice. 

And further, what is wrong toward labor is equally 
wrong toward capital, and if labor can show that it is 
entitled to any privilege, certainly surplus or accumu- 
lated labor is entitled to the same privilege and con- 
sideration, even though the thriftless laborer may call 
it capital or wealth ! 

It is the most tragical thing about the career of 
Colonel Roosevelt that having, while Governor of 
New York, induced the passage of two of the most 
uneconomic laws attacking wealth ever enacted ; and 
having as President of the United States pursued the 
attack on capital and big business by instigating the 
Northern Securities case and attempting to enforce the 
so-called "Sherman Anti-Trust Law," and pressing 
charges against the railroads, against the packing 
companies, against the insurance companies, and 
others, he lived to see the folly and unsoundness of his 
attitude towards business demonstrated, and saw the 
Government compelled to abandon its entire program 
and reverse its whole attitude toward wealth and big | 

business in order to save itself and our people. 

While President, Colonel Roosevelt delivered an 
address before the students at Harvard, in which he 
railed at the men who did not do real work. Astonish- 
ing! for there was probably no man who ever lived 
who knew less than Roosevelt the meaning of real 
work. It is doubtful if he ever earned a dollar in his 
life by physical toil or by the construction of anything. 



THE REWARD OE LABOR 53 

He never earned a dollar in his life in commerce, or 
business of any kind, and dying, there is not a spot 
on the earth that shows a dollar's worth of improve- 
ment or betterment that he produced. 

Compare, if you please, the record of his life with 
that of James J. Hill, who constructed thousands of 
miles of railroad and opened up millions of acres of 
land that were formerly wild and inaccessible ; who 
bettered the conditions and raised the wages of hun- 
dreds of thousands of men and women by the oppor- 
tunities for work that he created. Look at the cities, 
whose creation and growth he inspired, and the wealth 
and prosperity of a half dozen states which his vision 
conceived and which his work made possible. 

Which was the greater worker, a Roosevelt who 
railed at swollen fortunes, malefactors of great wealth, 
and who sowed discontent and envy among the masses 
of the people, or a Harriman, who took the bankrupt 
Pacific railroads of¥ the hands of the Government and 
by his genius for management and development not 
only recreated them and made them efficient servitors 
of the states through which they ran, but by improving 
their service and reducing their transportation costs 
brought prosperity to a score of states and increased 
the wealth of the people of those states, which Avere 
dependent upon them, by a sum not less than 25 billion 
dollars. 

The fortune that Mr. Harriman left is a mere pit- 
tance compared to the wealth which he created for 
others. A commission so small when expressed in 
percentage of the money that he made for others, that 
if the ordinary man were offered business on the 



54 A DEFENCE OF WEALTH 

same percentage he would spurn it with contempt. 

The foresight and courage of Commodore Vander- 
bilt in the organization and consolidation of the orig- 
inal scraps of road and in the construction of the 
missing links that created the New York Central & 
Hudson River system, was what determined the lead- 
ership and pre-eminence of the State of New York in 
population and wealth in our country. Every man 
who is proud of the fact that the Empire State is the 
first state of our Union in population and wealth owes 
a debt of gratitude to old Commodore Vanderbilt. 
The paltry millions that fell to him were an infinitesi- 
mal part of the total wealth that his work gave to this 
state and its people. 

It is strange that President Roosevelt, having de- 
voted his entire adult life to criticizing the deeds done 
by the doers of things, should have advised the stu- 
dents of Harvard to be doers rather than critics of the 
deeds that others do. The doers so freely criticized 
and characterized by Roosevelt, as "malefactors of 
great wealth," "plunderers," "predatory geniuses," etc., 
are the manufacturers who built up the greatest 
plants in the world ; the merchants who extended the 
market for American-made goods to the uttermost 
limits of the earth ; the builders of those great railroad 
systems that have carried the products of American 
labor to market at the smallest cost ever paid by hu- 
man labor to deliver its products. They are the 
men who went into the desert and the wildnerness and 
there built great states and made opportunities for 
millions of men, while Roosevelt, who never produced 
a dollar's worth of any commodity in his life, secured 



THE REWARD OF LABOR 55 

his opportunity to become the President of this great 
people by criticizing and leading in the attack upon 
these men who had done these wonderful things. 

There have been many efforts to make an economic 
explanation of "the panic of 1907," but none can be 
found because none exists. There never was a finan- 
cial convulsion in the history of the world that was so 
truly a panic and based on fear alone as was the one 
of 1907. It was due solely to the charge, first made 
by Roosevelt, that all great bankers and business men 
were "malefactors of great wealth." His cry was 
taken up by all the lesser politicians and demagogues, 
chattering the Roosevelt vocabulary of "plutocracy," 
"sordid oppression," "crookedness," "unscrupulous," 
"dangerous," "criminal," etc., until every man who 
had a dollar's worth of anything became afraid to 
trust anybody else and tried to liquidate and hide hard 
earned money in his fear. 

It is one of the curious things in connection with 
the attack on great business corporations and the 
efficient service which they render through their com- 
mand of great ability and large capital, that they re- 
duce prices. Their incompetent and inefficient com- 
petitors always claim that this reduction of prices is 
due to some sort of secret rebate, or is a deliberate 
underselling to force them out of business, and ignore 
the prime economic feature of the whole business, 
which is that the reduced prices inure to the benefit 
of the mass of people who are the consumers of the 
product. 

It is strange indeed that these enemies of wealth and 
efficiency are able to command the hearing that they 



56 A DEFENCE OF WEALTH 

do when the thing that they ask is that people shall 
compel efficiency and capital to charge a higher price 
to consumers than is economically necessary in order 
to give their inefficient and uneconomic competitors a 
chance to exist at the expense of the people, who would 
be better served by the large corporation with its bet- 
ter product produced at a less cost. 

Practically eYtrj law that has been passed in re- 
sponse to popular clamor against wealth has been to 
declare criminal some practice that was economically 
sound and morally just, in an effort to handicap the 
efficient and economical business operations of able 
men and give the incompetent, the little and the mean, 
an opportunity to live off of the necessities of the poor. 
What is needed is not a reformation of business 
methods, but a repeal of unjust and uneconomical laws 
that are hindering and preventing the able and the 
efficient from giving the masses of the people the 
benefit of economic production and cheap distribution. 

The legislation which has prevented this and kept 
alive the expensive, inefficient and uneconomic little 
business men, is the thing which above everything else 
has raised and keeps up the cost of living. 

Few people realize how the great developments 
which have made possible the luxury and comfort in 
which they are living are due not only to the existence 
of wealth but to the courage, foresight and real benefi- 
cence of wealth. 

Our people have so long been relieved from the 
primitive methods of harvesting and are so ignorant of 
the use of the hand-sickle, or of the flail, or of the 
threshing floor, that they do not realize how much of 



THE REWARD OF LABOR 57 

labor has been saved and how much of wealth has been 
created for the farmers by the invention of harvest- 
ing machinery. 

The money made by the harvesting companies is a 
small percentage of what their devices and machinery 
have saved not only the farmer but all the people who 
consume farm products ; yet our people have been 
taught that the International Harvester Company is 
the last word in plundering practice, thievery, and un- 
fair tactics. 

Andrew Carnegie, in his ''Gospel of Wealth," called 
attention to the great changes in the standards of living 
brought about by modern manufacturing methods 
based on the use of great capital. In the primitive days 
before wealth in large quantities existed, articles were 
manufactured at the domestic hearth, or in small shops, 
which formed part of the household. The master and 
his apprentices worked side by side. The apprentices 
lived with the master, and when they rose to be masters 
in tlieir turn, there was little or no change in their 
mode of life, and they in their turn educated in the 
same routine, their apprentices. 

The inevitable result of such a method of manufac- 
ture was crude articles at high prices like the hand- 
made nail. Today, with machines made possible by 
wealth ; with manufacture in quantity made possible 
by large capital, the world obtain commodities of ex- 
cellent quality at prices which even the generation be- 
fore this would have deemed not only impossible but 
unbelievable. The result is that the poor today enjoy 
what the rich of those times could not even afford. 
The luxuries of those days are the commonest of our 



58 A DEFENCE OF WEALTH 

necessities today. The poorest laborer lives with 
more comforts than were possible for the richest of 
men a hundred years ago. The advance is due en- 
tirely to accumulated wealth and to its use as capital 
in production, and he would be indeed a foolish stu- 
dent of social conditions to claim that the masses of the 
race have not benefited thereby. 

The real truth is that competition as we know it 
never existed, and never could exist, under the condi- 
tions that prevailed before the introduction of modern 
transportation methods. Each community was more or 
less self-supporting and it was impossible for any dis- 
tant iron merchant to compete with the local black- 
smith, who manufactured such iron horseshoes as 
were necessary for his local customers, but with the 
development of modern transportation along with 
modern industrial efficiency, true competition has been 
developed. Whether the law of competition be good 
or evil, it is here. Evolution is competition ! We must 
recognize it and adapt ourselves to it. 

It is idle to pretend that competition can be pre- 
served in some things and eliminated in others. In an 
effort to preserve competition, our laws have been 
drafted to prevent combination or the adoption of de- 
vices by wealth or capital, that would eliminate com- 
petition, but when individual men or bodies of men 
organized into labor unions find themselves compelled 
by the operation of the same law to work at high ten- 
sion or to starve, they protest bitterly and cry out 
against competitive conditions, and endeavor to stop 
the operation of this natural law. The law of competi- 
tion may seem hard or cruel in its operation in individ- 



THE REWARD OF LABOR 59 

ual instances yet there can be no doubt that it is best 
for the race. Labor was not indulged in by the savage 
for it took little effort to satisfy his wants, and al- 
though we have traveled far from savagery, there are 
still but few individuals among few races who have 
learned to work voluntarily. The law of competition, 
therefore, has operated and will operate to insure the 
survival of those who have best developed the habits 
of work. 

No man in the world can possibly consume all that 
he can produce, and if he works steadily at production 
he is bound to create a surplus. The only thing that 
prevents any man from piling up a surplus and so 
accumulating more or less wealth is his indisposition 
to keep up effort and to continue work when his con- 
suming power is satisfied, or to take care of his surplus 
of production properly when it is created. 

Political economists pay little attention to one of the 
greatest necessities for the constant production of sur- 
plus and the accumulation of wealth. Much of what 
we call wealth exists in the buildings and improve- 
ments that have been created out of surplus labor in 
the past, but these buildings rapidly deteriorate and 
depreciate or become obsolete and unfit for the loca- 
tion where they are, and must be destroyed and re- 
moved in order to replace them with better, more 
modern buildings suited for the needs of the commun- 
ity. This is only possible by the constant production 
of surplus wealth to cover or replace the wealth rep- 
resented by the old buildings which must be destroyed, 
and to provide the surplus necessary for the erection 
of new. This constant deterioration and wasting away 



60 A DEFENCE OF WEALTH 

of wealth is a thing which has been given little notice, 
and yet it is true that there are not over two or three 
conspicuous private fortunes in the world today over 
one hundred years old. 

While Mr. Roosevelt was President, he proposed to 
limit the size of inheritable estates and to make it im- 
possible for men of wealth to leave all their property 
to their wives and children, a strange proposition to 
come from one who inherited the fortune that enabled 
him to abstain from work and business during life and 
devote his whole time to politics and agitation. The 
degree of his sincerity may be judged from the fact 
that his will did not contain a single public bequest 
but gave his entire fortune to his wife and children, 
while it is significant that the chief possessor of wealth 
who died the same year, Mr. Frick, left $100,000,000, 
or four-fifths of his fortune, to public use and for 
public benefit. 

Chief Justice Coleridge, in discussing the subject of 
inheritance, said : "The end of property is subsis- 
tence, by which end nature has bounded our preten- 
sions to it, hence in a state of nature we cannot take 
more than we use nor hold it longer than we live and 
are capable of using it. The manner of acquiring 
property in a state of nature is by taking it or occupy- 
ing it. All other modes of transmitting or acquiring 
property are acts of positive and civil law, which laws 
prevent the property of the dead from reverting as it 
otherwise would do in a state of nature to the common 
stock. The particular rules by which the endowment 
of property is regulated differ in every country in the 
world, and must rest at last upon one and the same 



THE REWARD OF LABOR 61 

foundation, the general advantage. All laws of 
property must stand upon the fact of the general ad- 
vantage, for a country belongs to its inhabitants, and 
in what proportions and by what rules its inhabitants 
are to occupy, or own its property, must be settled by 
the laws which they create." 

Justice Coleridge's remarks on the subject of in- 
heritance are just as far as he goes, but he neglected 
to explain why the laws of inheritance have been so 
jealously preserved. In primitive society the property 
of the dead reverted to a state of nature and became 
subject to seizure by the strongest surviving individual 
in the immediate vicinity and this individual upon pos- 
sessing himself of the property of the decedent usually 
proceeded at once to exterminate the children and 
family of the man who had just died in order to pre- 
vent any rival claimant to the property growing up. 
The common good, therefore, required the recognition 
of the rights of the children of the dead to their 
property in order to prevent this common slaughter 
and extermination of the family of the possessor of 
property. Surely those who are attacking property 
and the rights of inheritance do not wish to bring back 
the primitive conditions that prevailed before the 
rights of inheritance were recognized. 

There is no such thing as dishonest wealth. All 
wealth must have been honestly created originally. If 
it is in the hands of one who does not deserve it, it 
can only have reached there in a distinct way. One 
can steal that which another has produced but the 
world has always recognized thievery and punished it. 
The producer of wealth may have a gambler's in- 



62 A DEFENCE OF WEALTH 

stinct and risk it in a gambling venture, as so many 
do, but it is impossible to denounce the winner in a 
gambling proposition and excuse the loser. The pro* 
ducer of wealth may be, as he often is, a spendthrift 
in which case he squanders it, or he may be incompe- 
tent in the matter of management and care or conser- 
vation, in which case he wastes it. 

The existence of so many millionaires is in itself evi- 
dence of the extreme carelessness and improvidence 
of the mass of mankind. For if they were careful and 
thrifty and saved the surpluses that they make there 
would not be so much wealth scattered around for the 
tireless gleaners or the industrious scavengers to 
gather up. Remember the fortunes made out of the 
garbage business ! 

Lyman Abbott once told of a man who put $60,000 
into a gold mine and in two years without doing a 
stroke of work or using his brain took out $2,000,000. 
This, he declared, was not just and that society was 
going to change the conditions that made such a thing ^ 

possible. Fortunately for Dr. Abbott he does not claim I 

that the man who had the $60,000 did not use his 
brain in accumulating the $60,000, but he entirely 
overlooks the fact that no laborer dependent on his I 

labor alone could have undertaken the work of digging 
for this gold. If somebody had not accumulated $60,- 
000 to support labor while it prospected and hunted, 
this particular block of gold would never have been 
found, and as for the return, the Doctor ignores en- 
tirely the fact that the labor that prospected and 
hunted was supported and fed and clothed while it so 
hunted and dug, regardless of whether the gold had 



THE REWARD OF LABOR 63 

been found or not, and that if the gold had not been 
found, then labor would have turned to other work, 
not only no poorer by reason of the failure of its search 
but just as well if not better off than it had been be- 
fore, while the thrifty man who had saved up the 
$60,000 and paid it to labor would have lost it all. 

It is common to denounce the possessors of wealth 
gotten by the discovery of mines or oils and similar 
hidden things, but the search for hidden mineral 
wealth is open to everyone and is even more hazardous 
and uncertain in its return than is the search for game. 
No one can engage in this hazardous search, uncertain 
of return, except one who has by extra effort thereto- 
fore accumulated a sufficient surplus to support him 
while he engages in this hazard, which may take him 
such a time as may compel him to consume his sur- 
plus and may have found him nothing when that sur- 
plus has been consumed and spent. Few are willing 
to take this hazard, and yet the hidden mineral wealth 
when found is for the benefit of all users thereof. It 
is, therefore, ethical, right and just that the individuals 
who are willing to spend their accumulated surplus in 
the search shall receive profits in proportion to the 
hazards which they have taken. Besides it is not they 
who put the price on the stufif found but the millions 
who refuse to take part in the search for it. It is al- 
ways capital, even though it be small, that must take 
this hazard. Labor never hazards anything in such a 
search, for labor has nothing to hazard. 

All these preachers in favor of a "fairer distribu- 
tion of wealth" or a more even distribution of wealth, 
fail to show where the justice or equity is in taking 



64 A DEFENCE OF WEALTH 

surplus production from the man who works to pro- 
duce it and dividing it with the man who went fishing 
or swimming while the other fellow worked. But 
above all, these preachers for ''equitable division of 
wealth" and property ignore the moral effect upon the 
man who receives that which he knows is the product 
of another's labor, industry or thrift and which he also 
knows to be something toward the production of 
which he has contributed absolutely nothing. 

President Elliott of Harvard declaims with great 
force against "the abuse of great salaries in corpora- 
tions," and declares that the huge salaries of recent 
times enormously overpay their recipients, and he in- 
sists that the exaggerated salary is not really neces- 
sary either to get or to keep the best men. 

In a corporation of which I have knowledge, a Vice- 
President drawing a salary of thirty thousand dollars 
a year, devised a new method of handling his com- 
pany's business that saved them six hundred thousand 
dollars in a single year. By his single device he saved 
that company enough to pay the entire cost of his 
services for twenty years, and no one can tell what he 
will yet be worth to the company in the future. The 
truth is that this man is not being paid for his services 
at all but he is actually paying 95 per cent, of what he 
earns to the corporation for the privilege of serving it, 
and this is far less rather than more than what most 
men of brains pay to the mediocre mass of mankind 
for the privilege of serving the ignorant and unap- 
preciative people, who declaim against them. 

One of the great insurance companies, that has for 
years kept a record of dishonesty and breach of faith 



THE REWARD OF LABOR 65 

in business, has called attention repeatedly in recent 
years to the enormous growth of dishonesty among the 
masses of the people. It does not pretend to give a 
reason for this growth of dishonesty, but there can be 
no doubt that it is largely, if not entirely, due to the 
constant preaching of inequity, to a general repudiation 
on the part of the mass, of the property rights of the 
thrifty and saving in the product of their thrift and to 
the inculcation of the theory that what belongs to cor- 
porations or institutions belongs to anybody, and that 
the thief in stealing from them is merely taking back 
a part of what belongs to him. 

What can you expect of the ignorant masses of 
people, when the Chief Executive of the Nation makes 
such a statement as this : 

"They grew richer and richer until it became a 

national scandal." 

Are the masses of the people to be encouraged to 
thrift and persuaded to save a competence for their old 
age if it is a scandal to grow rich? 

Senator Tillman, after spending most of his life in 
attacking wealth, in his old age realized his mistake, 
and in one of his last speeches said : 

"Men with means have their place in the scheme of 
civilization, let them spend their money for works of 
art and bring them into this country free that they 
may be an inspiration to our own artists. If there 
were no inequalities of wealth we would have no pal- 
aces, no art, no progress, no civilization. Equality is 
found only among savages." 

Even William J. Bryan has seen a light. At a re- 
cent meeting of laboring men he said : "The reward of 



66 A DEFENCE OF WEALTH 

labor is increased by the man of executive ability. I 
recognize that there is a talent that may be called 
'executive talent,' and that it is highly useful in the or- 
ganization of industry, and it is entitled to its just re- 
ward. What is left over for labor is larger than what 
would be left if industry were not organized." 

The talent for organization and management is so 
rare that its possessor invariably secures enormous re- 
wards no matter where he lives or under what laws 
or conditions he works. 

As Andrew Carnegie well said: *'The ability of a 
man, whose services can be obtained as a partner, is not 
only the first consideration, but is such a consideration 
that if he have the ability, his lack of capital is scarcely 
worth considering. For a man with ability soon cre- 
ates capital, but without the special talent required, 
the capital invested behind him soon takes wings." 

The dissolution of several of our great corporations 
has in each instance resulted in the dissolution of a 
more or less efficient organization, and has therefore 
resulted not only in an economic loss to the com- 
munity but has put an added burden of cost on the 
mass of people who had been and are users and con- 
sumers of their products. 

The Standard Oil Company was compelled, in re- 
sponse to popular clamor, to dissolve into its original 
twenty or more constituent parts and so forced by 
law to impose a score of overhead charges upon the 
public instead of one, with the result that what con- 
stituted a single share in the original trust and sold 
for only $600, rose in earning power so that the 
twenty scraps sold for over $2,000. If the Standard 



THE REWARD OF LABOR 67 

Oil Company had done this of its own motion it would 
have been charged with watering its stock. 

It would be amusing if it did not display such piti- 
able lack of economic understanding to analyze the 
many wild attacks upon capital and wealth and the use 
of corporations, on the score of alleged stock watering. 

There is not and never has been such a thing as 
watering stock. It is absolutely and utterly impos- 
sible. 

A Chinese Emperor finding that people were hoard- 
ing the precious metals, took iron and cast it into large 
disks, which he stamped with the denomination of 100 
cash, but the soldiers, whom he paid with this currency 
threw it away in derision, knowing that it was prac- 
tically worthless. The Imperial stamp declaring it to 
be worth 100 cash did not deceive anyone for a 
minute. A later Emperor hoping to escape the ex- 
perience of this one, took copper and casting it in the 
form of money stamped it as of the denomination of 
10 cash, but the people were undeceived by the attempt 
of their Emperor to "water" the coinage. Recognizing 
the value of the copper they weighed it, found it to be 
worth intrinsically two cash, and thereafter all ten 
cash pieces circulated as of the value of two cash each. 
So it was that although they bore the denomination of 
ten cash, still when a merchant asked you 10 cash for a 
cake he received from you not one of these copper 
pieces but live. English kings had the same experience 
with their coinage as did the Chinese emperors, and 
modern corporation organizers and financiers have had 
exactly the same experience with their corporate shares. 

When the Steel Corporation was organized the great 



68 A DEFENCE OF WEALTH 

banking house of Morgan issued shares that bore on 
their face a certificate that they were of a denomination 
of $100 each, but not one soul in the world was de- 
ceived thereby. The public recognized the speculative 
character thereof and expressed its hope that efficient 
management and economic operation might give them 
some value. It therefore purchased a few at about 
30 cents on the dollar, then deciding that its hopes 
were too remote of attainment, refused to accept the 
shares even at this valuation, and they repeatedly de- 
preciated in public estimation until they reached a 
quotation of $8 for a $100 share, or about one-twelfth 
of the fictitious denomination. 

At this price, which was all that the promoters could 
get for them, if they attempted to sell, there was little 
if any "water," and if the price of these shares has 
since approached, or exceeded, the denomination 
originally stamped upon them by the organizers and 
promoters of the Steel Corporation it is because twenty 
years of hard work, efficient management and re-in- 
vestment in the business of the surplus earnings, 
created not "water" but actual property of an intrinsic 
value greater than the price at which the shares are 
now quoted. This is because the public, while recog- 
nizing the existence of property equal to or in excess 
of the par value of the shares, doubts the ability of its 
management, though known to be honest and efficient, 
to continue earnings in the face of economic conditions 
that threaten the possible market for its products. 

And this is true of the shares of every company ever 
organized, promoted, and financed, where its shares 
have been sold to the public. The people have always 



THE REWARD OF LABOR 69 

ignored the denomination of the shares, or its nominal 
capitahzation, and has expressed its opinion of the 
real values by the price it has been willing to pay for 
the shares. This being true, it is idle to pretend that 
the denomination printed on a share certificate, in 
anywise deceives anyone, or is any possible offense, 
social or ethical, against government or people. 

The payment in full in cash for a stock, which is 
asked for by these ignorant social economists, is no 
insurance either of values or of prosperity, for financial 
history is full of the cases of corporations, whose 
shares have been paid for in cash in full, that lost their 
money, spent it in useless development, and which sell 
today at a bare fraction of the actual cash par paid in 
therefor, while literally thousands of such companies 
have lost all their money and gone bankrupt. 

Yet, if there were any merit in the argument against 
so-called "stock watering," the people ought in some 
way to have been protected when they invested in the 
shares of a company that had actually had $100 in 
cash paid in for every $100 cash certificate issued, 
but the whole world knows that this is not so, and 
furthermore, that it is impossible to make it so. How 
do you suppose the public determines the value of 
these new stock shares issued without dollar denomi- 
nation? It makes such valuation as it can of the 
actual property held by the company, adds a little to 
this or deducts some according to its judgment of the 
promoters and managers and divides the result by the 
number of shares. 

Socialists and political philosophers talk of un- 
earned increment as tho it were peculiar only to the 



70 A DEFENCE OF WEALTH 

increase in the value of land. They ignore the fact 
that the principle which adds to land that value which 
they call unearned increment operates in every branch 
of human endeavor. The growth of population which 
adds an unearned increment to land makes possible an 
increased circulation for a newspaper and so adds to 
the unearned increment of the publisher. It adds to the 
trade of the corner grocer and so adds to his unearned 
increment and makes the corner location so desirable 
that other grocers down the block bid high for the 
corner location. This same influx of population in- 
creases the demand for trucking, and so adds to the 
unearned increment of the owner of trucks. It adds 
to the demand for housing and so adds to the business 
and the unearned increment of the dealer in lumber 
and brick and other building materials. And lastly, 
by the increased demand for houses it increases the 
demand for labor, raises wages and adds to the un- 
earned increment of the laborer. The truth is that 
there is no such thing as "unearned increment." The 
term should be driven from economic discussion and 
it should be finally recognized that any change for the 
better in the condition of a community, adds to the 
value of whatever any inhabitant of the community 
has to sell, whether it be land or trade or labor. 

William Jennings Bryan, in an address to the stu- 
dents of the University of Pennsylvania, declared that : 
"No individual or corporation has a right to accumu- 
late more than a fair return for services rendered to 
society. There should be a code of laws," said Mr. 
Bryan, "for the regulation of wealth which would put 
an end to the power of the individual to accumulate 



THE REWARD OF LABOR 71 

vast sums of money. A man can rightfully collect from 
society no more than he honestly earns and the amount 
he can honestly earn is not more than what fairly 
measures the value of the services he does for society." 

Yes, but can anyone estimate the value of the serv- 
ices rendered to society, to the world and the billion 
and a half people in it, of Mr. Rockefeller, who by 
making safe and cheap the use of petroleum and by 
building up an economical system of distribution has 
spread the use of illuminants throughout the world, 
turned the night into day, banished ignorance and 
superstition, and done more to make possible reading 
and study, and the spread of education and culture, 
than all the men who lived in the world before his 
time? Who can measure the value of the services to 
mankind of Thomas Edison, with his many inventions? 
Or a Philip D. Armour, who by the development of 
refrigeration and cold storage, has brought within the 
reach of the poorest in the land, a quality of meat that 
was not only out of the reach of the richest but was 
absolutely unknown until he introduced his methods 
into the packing house business? Or who shall say 
what it was worth to the world to discover the method 
of refining sugar, that reduced it from its original 
cost of 25 cents or a shilling a pound, when that rep- 
resented a day's work, to its recent price of 5 cents 
a pound, which in our country at least is not over one- 
one-hundredth of the wages for a day ? 

If it is right for labor to demand and get as much as 
it can for its work, is it not equally right for the man 
of brains to demand and get as much as he can for his 
thought, or his invention, or his device; and is it not 



72 ^ DEFENCE OF WEALTH 

equally right for the man who has accumulated a sur- 
plus, either by work or by his thought, to demand and 
get as large a share as possible in the joint product of 
his surplus and the work of those, who appeal to him 
for support out of his surplus, while they labor to pro- 
duce some thing of extraordinary value that could not 
and cannot be produced unless labor is supported dur- 
ing the long or difficult task of production? The same 
morality covers them all. And, if ignorant labor scat- 
ters and wastes its surplus production, is it immoral or 
criminal for intelligent thrift to glean and gather what 
would otherwise be lost? 




Chapter VI 

THE CRITICS OF WEALTH 

YoM Cant Eat It Up, or Drink It Up, Without Killing 

Yourself 

AMUEL J. TILDEN, presiding at a dinner 
given in 1877 to J. S. Morgan, grandfather 
of the present J. P. Morgan, and propos- 
ing the health of the great banker, who 
founded this house, said : 

"Every man, who by any effort reduces the cost or 
increases the output of any services demanded by so- 
ciety, to that extent enlarges the productive capacity 
of human labor and increases the result of its exercise. 
These men whom we see around us, the owners and 
manufacturers of colossal capital, associated together 
in great corporations, undoubtedly have an illusion, 
at least some of them have, that they are working for 
themselves, but I have the satisfaction of knowing that 
they are chiefly working for their corporations and for 
their stockholders, but I, on behalf of the public, 
assert that in the main they have worked and are 
working for the public. While we see these men with 
colossal fortunes and managers of great associated 
capital, seeking to all human eyes their own selfish 
gain, there is a wise and beneficent overruling provi- 
dence which directs events so that nearly all they do in 
lessening the costs of these services results not in en- 

73 



74 A DEFENCE OF WEALTH 

larged profits to their companies and to themselves but 
in diminishing- charges and so inures to the benefit of 
the masses of the people. It is not possible under nat- 
ural laws that any but a comparatively inconsiderable 
share of the results of their planning, their efforts, their 
skill and their sacrifices, shall go anywhere else than 
to the benefaction of the general public. And even 
this comparatively small share which those who do the 
transportation for human society are able to receive 
as profits, so long as it is invested as active capital 
for doing the necessary and essential services in the 
work of transportation or otherwise, is by creating 
better machinery, better processes, and wider compe- 
tition, all resulting in cheaper service to the public. 
When we come to the small fraction which the owners 
or managers of these great capitals are able to apply 
to their personal use, or to lay up for such use, the 
first thing that strikes one is that they cannot even 
carry a carpet bag on their long journey to that bourne 
from which no traveler returns. Even these small 
fractions which they accumulate, after their owners 
have left them, sink into the mass which society in the 
aggregate owns and undergoes a fresh distribution." 

It is difficult to see how a man, who was so great a 
statesman and so sound an economist, failed of election 
to the Presidency of the United States. 

Illustrating this point, is a recent figure used by the 
late James J. Hill, who said: "The law-making au- 
thority has fluttered about the natural and necessary 
transportation much as a fly buzzes about a horse. 
It may sting and annoy but it never hastens nor im- 
pedes the progress of the horse unless the flies become 



THE CRITICS OF WEALTH 75 

thick enough and bite hard enough to bring him to a 
halt in the effort to drive them away." 

This is exactly what has happened in the railroad 
situation. The horse, which though irritated for years 
by the biting of the legislative flies, has continued pull- 
ing his load, has finally found the flies so thick 
that it has been compelled to stop and bite and kick 
the pests which refuse to be switched off with its tail. 
The people who have been applauding the buzzing of 
the flies, may now decide how they like the service 
of transportation produced thereby. 

Dr. Josiah Strong, in one of his addresses, stated 
that: "For twenty years the church had deplored the 
fact that workingmen as a class refused to attend the 
church, and claimed that it was because the working- 
men felt that the church belonged to the capitalistic 
class." The truth is that the laboring class as a rule 
are too ignorant to understand a spiritual truth or to 
respond to a religious appeal. They are too much 
interested in the questions of food and drink and the 
satisfaction of primitive appetites, to understand or to 
have any interest in spiritual things. Then too, the 
working man as a rule is unable to see the use or 
benefit of churches and not only refuses to give up any 
of what he calls his "hard-earned cash" to churches 
but he refuses to go to church or attend a service 
where he is asked to give up anything. 

A prominent clergyman recently declared that: 
"If employers were animated with the spirit of 
Christian love, labor would be satisfied with the 
conditions under which it worked." It is difftcult to 
see on what the Reverend Gentleman based this re- 



76 ^ DEFENCE OF WEALTH 

markable statement. He neglects to say how this love 
is to be exhibited — should the employer encourage 
labor to work more or harder or more honestly and 
efficiently or does he mean that the employer should 
voluntarily give to labor more than it earns and s© 
encourage it to work less? 

Economic history is full of the record of the experi- 
ments made by employers to increase the output and 
efficiency of labor, but these efforts unless based on the 
demand that labor shall work and deliver the goods 
or starve have invariably failed. In Mexico, American 
employers doubled and trebled the wages paid to Mex- 
ican labor by their Mexican and Spanish employers in 
the hope and expectation that they would get better 
work and more continuous work, but the result has 
only been to enable the Mexican laborer to earn as 
much in two or three days as he formerly earned in 
six, so that when he had worked but two or three days 
he invariably quit work for the rest of the week to 
spend his earnings. Exactly the same experience has 
been that of employers of negro labor in the South, and 
it is a notorious fact that during the recent war the 
raising of wages in an effort to get increased efficiency 
and output only resulted in lowering efficiency and 
output and compelling high-paid laborers to take two 
or three days off from their work every week in order 
to spend their money. 

A student of this question investigated the results of 
Henry Ford's minimum $5-a-day wage at his auto- 
mobile plant, and reported that the result had not been 
any increase of efficiency or output but only an in- 
crease of spending and dissipation. 



THE CRITICS OF WEALTH 77 

The reports of the insurance companies indicate that 
less than 4 per cent, of all the persons dying have 
accumulated sufficient surplus to leave anything large 
enough to be considered an estate or to demand ad- 
ministration or legal attention. It is also a significant 
fact that certain statistics show that about four or five 
per cent, of our population are owners or holders of 
shares of the corporations of this country. In other 
words, practically every person, who has accumulated 
any property at all is a partner in some one of the 
business or utility corporations of the United States, 
and an attack, therefore, on our corporations is an 
attack on every individual who has beenthirfty enough 
to accumulate any surplus above what he has been 
compelled to spend in living. 

The laborer, who must feed himself each day with 
the product of that day's work, cannot undertake a 
labor the returns from which can only be reaped in 
the future. It is only the man who has accumulated a 
surplus large enough to keep him through a year, who 
can plant and sow and wait for the harvest. 

It was not until some men had accumulated surplus 
enough not only to support themselves but to support 
many of those laborers, who live from hand to mouth, 
for a year or for several years that mankind was 
able to attempt and to carry out those great works that 
now remain to us as monuments of human industry. 
Without the thrift and aforesight of such individuals 
to accumulate such surpluses of supplies, we would be 
without those great works like the Pyramids, the 
Tombs, and Reservoirs of the Nile, the Irrigation Sys- 
tems of India, the Canals and Walls of China, and all 



78 A DEFENCE OF WEALTH 

those things that have done so much to make habitable 
the inhospitable parts of the earth and to lighten the 
burden of living for millions of mankind. 

When the great tunnel through Storm King Moun- 
tain and under the Hudson was being constructed in 
order to bring a pure water supply into New York 
City, an irresponsible newspaper man was sent up to 
write a story of the work. He was taken down in the | 

tunnel and shown the men at work, and when he came 
out, irresponsible as he was, his story recorded a most 
extraordinary impression, which I shall give in his 
own language : 

"It was curious," he says, *'to note the purely me- 
chanical stroke of the crowbar and shovel ; the work- 
men simply went faithfully through the motions that 
they were hired to make, not one of them worked as if 
he had an interest in the job yet not one was lazy or 
shirking. The engineers, however, showed the intensest 
interest, a nervous, high-strung devotion, as if brain 
and heart were all in the enterprise. On them was the 
responsibility of the shovels, the blasts, the results, 
but the living machines, the workmen, just put forth 
the muscular movements that the engineers had calcu- 
lated to be necessary. 

"The exposure and danger were alike to both the 
engineers and the laborers, but the laborers could give 
their undivided mental energy to keep up their pluck, 
to safeguard themselves from nervous depression, to 
keep muscles mechanically moving, not an ounce of 
energy did they need to expend in thinking! The 
workingman swung the tools, swung and swung, until 
liis shift was relieved and he was done, but the eager 



THE CRITICS OF WEALTH 79 

and expensive thinking was burning up the vital forces 
of the engineers. The push, the relentless will, that 
attacks each fresh menace of defeat; the hours by 
night and day when dauntless faith in his figures alone 
sustains the engineer as he defies nature, these things 
earn large compensation. Nothing of this was sug- 
gested by any remark of the engineers themselves, 
who seemed happy as conquerors, but I should want 
others to see it in this light." 

Only accumulated wealth to an enormous amount 
has made possible this extraordinary undertaking that 
is to furnish pure mountain water to the millions who 
live in New York City. 

Only accumulated wealth has made possible the net- 
work of railroads in our country that has made it so 
easy and so cheap to transport food and other sup- 
plies from any part of the country to another, and so 
has made impossible in this country the famines that 
have swept off the populations in others. 

Only accumulated wealth has made possible in this 
country the scientific light which has made possible 
home reading and study of evenings and so made our 
people the best educated and best informed people in 
the world. 

It is useless to rail against the idle rich for unless 
they are educated and thinkers they soon exterminate 
themselves. I once knew intimately an Irish rail- 
road contractor, so ignorant and uneducated that it 
was impossible for him to write a longhand letter. He 
could barely sign his own name, yet he had made him- 
self more than a millionaire by railroad construction in 
judiciously selected locations. Ignorant, uneducated 



80 A DEFENCE OF WEALTH 



and uncultured, he had no interest in the world except 
money and complained bitterly that his money was of 
no use to him because he could not eat it up or drink 
it up without killing himself. In an effort to keep 
him from doing that I undertook to get him interested 
in art, and finally induced him to spend several hun- 
dred thousand dollars in buying a collection of the 
best modern painters. 

One of the great Socialist papers complaining of the 
financial methods of the late J. P. Morgan, wrote an 
editorial, asking: ''Why don't the people hire J. P. 
Morgan and be done with it?" The strange thing 
about the Socialist writers and thinkers is that they 
fail to realize that that was exactly what the people had 
been doing from the time Mr. Morgan entered business. 
He had been in the employ of the people, gathering to- 
gether the little surpluses from here and there until in 
his hands it became a surplus of a size sufficiently large 
to construct great service institutions for the benefit 
of the people. The so-called fortune that Mr. Morgan 
left at his death was really only a small commission 
paid by the people to Mr. Morgan for his lifelong 
services in their behalf. 

One of its readers protested to the New York 
Journal against the purchase by J. P. Morgan of a rare 
book at the Hoe sale for $42,800 and asked the Journal 
to write an editorial denouncing such waste, but the 
Journal replied that, "They were unable to criticize 
Mr. Morgan's action in paying $42,800 for a book," 
saying, "first, we must point out to our reader that 
the world is no worse off or poorer now than it was 
before Mr. Morgan bought the book. Nothing was 



THE CRITICS OF WEALTH 81 

actually spent when the book was bought. The only 
difference is that $42,800 that once belonged to Mr. 
Morgan now belongs to the heirs of Mr. Hoe. Does 
that make any difference to anybody or do any harm? 
Not a bit of it! If, however, Mr. Morgan had taken 
$42,800 and squandered it by employing men in use- 
less labor and taking them away from useful labor 
that would be a loss. 

"The big prices that Mr. Morgan pays stimulates 
research and sets many men to hunting in ruins or in 
old book stores and picture galleries and collections 
for valuable works of art. A man renders great 
service to the public and to the future, who collects 
these priceless treasures, puts them in fireproof build- 
ings, as Mr. Morgan does, where they will be safe 
permanently, and makes it possible for all the people 
to see them and study them and get from them educa- 
tion. Mr. Morgan at least has made the future se- 
cure by gathering them together and protecting them 
instead of leaving them scattered in the hands of many, 
and probably, forever lost. But there is another par- 
ticular thing that Mr. Morgan has done, finer than 
collecting pictures, and more magnificent than building 
up a $1,500,000,000 Steel Corporation. Mr. Morgan 
has spent in the construction and maintenance of a 
Lying-in Hospital, devoted to the care of poor women 
and babies in New York City, more than he ever 
spent on any book or picture or collection at any 
time. In the Morgan Hospital, mothers in childbirth 
receive the best care that science can provide. They 
are looked after by the best nurses, highly paid, thor- 
oughly trained. They are asked no questions about 



82 A DEFENCE OF WEALTH 

their religion or nationality. The fact that a woman 
is poor and soon to be a mother is sufficient to obtain 
for her entrance to Mr. Morgan's Maternity Hospital. 
Mr. Morgan does in his hospital with the money that 
his financial genius has given to him, the work that 
the public ought to do but which the public does not 
know enough to do. Personally, we are extremely glad 
that Mr. Morgan has been able to pile up millions, 
since with the millions he does for the people most of 
the things that they have not brains enough to do for 
themselves." 

COULD WEALTH HAVE ANY GREATER 
DEFENCE than that coming from this paper, noto- 
rious for its attacks upon wealth? And take notice 
that the hospital referred to was constructed with part 
of the profits of the organization of the Fifteen-Hun- 
dred-Million-Dollar Corporation, which the Journal 
has so frequently condemned. 

Why could it not be equally just to Mr. Rockefeller, 
who through his wonderful Foundation has for years 
conducted a Bureau of Medical Research that has 
brought untold benefit to the whole population of the 
earth? He has done more to spread the cause of edu- 
cation than any man who ever lived, and is using 
his genius for organization to insure the continuance 
of the benefits that he has conferred on mankind, 
after he has departed this life. 

Several years ago, in describing himself and others 
who have accumulated vast fortunes, Mr. Rockefeller 
said : *T am harnessed to a cart in which the people 
ride ; whether I like it or not, I must work for the race. 
The first step I took in business obligated me to 



THE CRITICS OF WEALTH 83 

the men who worked for me and who thenceforward 
looked to me for employment, and investors who put 
in their money and looked to me for results. The 
workingmen, numbering but a few score at first, then 
hundreds, thien thousands, and now, approximately, a 
million and a half. There was a similar increase in 
the number of investors, who were holding me to 
account, while I worked for myself, I had to work for 
them. We are servants — not masters, we, who are 
or have been engaged in large business affairs. It is 
our most vital interest that the country shall prosper, 
and that all the people shall prosper, for only then can 
we find among them a market for what we produce. 
The people can destroy us, or our business, but in so 
doing they destroy our power of serving them. In 
fact, we would probably suffer the least. The richest 
man in the world can only eat three meals a day, and 
it does not take much to dress as well as is possible 
or to provide real luxury in living. The men who have 
acquired the largest fortunes have not pursued wealth. 
Had they desired money for the enjoyment of money, 
they would have stopped far short of spending their 
whole lives as they have in the struggle, that is busi- 
ness, but these men continue to toil at their desks, be- 
cause they love achievement. They work for the keen 
delight of creating something where nothing was, and 
some time the people will be convinced that these men 
were toiling for love of their country as well." While 
ignorance strives to destroy what it does not under- 
stand intelligence labors to reproduce in physical aspect 
that which it has seen in the mind's eye long before. 
The investment of wealth in the construction of 



84 A DEFENCE OF WEALTH 

large plants that have superseded small ones has re- 
sulted in the decrease in the price of kerosene from 30 
cents a gallon to 10 cents a gallon ; of sugar from 20 
cents a pound to 4 or 5 cents per pound ; of gas from 
$2.50 per 1000 feet to $1.00 per thousand, and elec- 
tricity from 25 cents a Kilowatt to 2 cents a Kilowatt, 
if used in large quantities. The charges of 8 and 10 
cents a Kilowatt now made for ordinary lighting serv- 
ice are due entirely to the cost of installation and the 
delivery of current in such small quantities as are used 
by the ordinary users of electric light. It is like ask- 
ing your milkman to deliver cream by the thimbleful. 

Careful investigation has discovered the fact that 
the prices of non-trust articles have advanced much 
more than the prices of the articles manufactured by 
trusts, and this is as we would have a right to expect, 
for articles manufactured by the largest corporations, 
or trusts, have every facility that great capital can sup- 
ply and command a higher efficiency and better skill 
than articles manufactured by smaller or non-trust 
producers. 

Two diflferent investigations conducted by the Gov- 
ernment have disclosed the fact that the meat packers 
do their business on less than a two-per-cent. margin, 
while the small dealer of meats, of poultry, or of green 
vegetables, makes from 100 to 300 per cent, on every 
sale. I know one keeper of a stand in front of a meat 
shop whose capital is only $100 but his turnover is 
$15,000 every year and out of it he makes $5,000 net 
profit. The retail prices of everything are abnormally 
high because there are too many retailers in the first 
place with too great an expense for rents and dupli- 



THE CRITICS OF WE ALTH 85 

cated delivery service. Instead of attacking the Pack- 
ing Houses for converting cattle and hogs on the hoof 
into meat on a two-per-cent. margin of profit, the 
v^hole meat-consuming public should ask the great 
Packing Companies to extend their efficiency into the 
retailing of meat and put out of business the hundreds 
of thousands of small meat shops that are compelled to 
charge the people abnormal prices for meat in order to 
run their small, uneconomically conducted businesses. 
It is possible that the Packing Companies would make 
additional large profits by doing so, but they would 
save the masses of the people who buy meats, hundreds 
of millions of dollars by so doing. Think what it would 
mean to every meat eater if meat was distributed as 
economically as the Standard Oil Company distributes 
oil. 

The experience of every attack on a so-called "trust- 
produced article" has been, that the break-up of trust 
methods and trust distribution has destroyed the effi- 
ciency in that line of business and made prices of such 
commodities higher to the consumers throughout the 
world. What is the use of declaiming against profi- 
teering while you keep on clamoring for laws that 
protect the profiteers and legalize their methods and 
impositions? 

The middlemen, who have made their livings hereto- 
fore, by standing between the producer and consumer, 
very naturally object to being eliminated and driven 
out of their easy livings. It is to their clamor that most 
of the economic legislation that harasses business 
should be attributed, but as certainly as the law of 
gravitation forces water to run down hill, so those 



86 A DEFENCE OF WEALTH 

methods that mean cheaper production and more effi- 
cient and economical distribution will tend to establish 
themselves in spite of legislative prohibitions. 

People must be brought to realize that the great or- 
ganizations that serve them so well are only possible 
through the existence of great wealth in the first place, 
and through the investment of that wealth in the pro- 
duction of articles for public use and construction for 
public benefit and service. The impossibility of the 
thriftless providing for themselves is nowhere better 
illustrated than in this matter of service. The rail- 
roads of this country were only possible through the 
use of the wealth of this country in their construction, 
and as long as wealth was protected in this form, the 
construction of additional railroads for the service of 
the country and the people in it continued. But when 
attacks began to be made upon wealth in the form of 
railroads, it became impossible to get new wealth to 
invest in this way. As the people have been getting 
no additional railway service on this account, either in 
new mileage or in additional trains and car service, 
traffic became congested, rolling stock deteriorated, 
and as a result, the labor of the country is suffering to- 
day from poorer train service, greatly increased costs, 
stagnation, and destruction of its own prosperity, be- 
cause of its own foolish attack on the surplus savings, 
or wealth, of those who formerly furnished them with 
abundant train service at a cost more than 50 per cent, 
less than they are paying now. 

People in attacking the corporations seem to im- 
agine that a corporation is some great monster that is 
self-creating and that devours them. The truth is that 



THE CRITICS OF WEALTH 87 

a corporation is one of the most beneficent devices of 
thinking men to enable people to contribute as much, 
or as little, as they please toward a fund to be used 
in some business or in some project without hazarding 
the rest of their savings or property. A corporation 
is nothing but a limited partnership, toward whose 
common fund the separate partners have contributed 
in proportion to their holdings of shares. Any given 
corporation is therefore simply a partnership made 
up of the farmer, the machinist, the merchant, the 
clergyman, the school-teacher, the doctor, the lawyer, 
and rarely the banker, who have contributed their 
shares to the common fund. I say, rarely the banker, 
because usually the banker instead of contributing 
to the original fund loans money to the partner- 
ship, so that the fund contributed by the others is 
security for his loan. 

Mr. Darwin P. Kingsley, in an address made some 
time ago on the subject of recent legislative tenden- 
cies, declared that: "It was no remedy to make suc- 
cess a crime, since life and liberty cannot be protected 
by failure." Someone attempted to answer him, de- 
claring that the "Sherman law denounces as criminal 
not success but the wicked methods that certain men 
have adopted to attain success." Now the Sherman 
law in its terms prohibits and denounces as criminal, 
combinations or consolidations by or between any per- 
sons, businesses or corporations that formerly were 
competing with each other. It ignores the fact that the 
competition that it sought to perpetuate nearly always 
resulted in the failure and elimination of one or the 
other of the competitors. Will anyone attempt to 



88 A DEFENCE OF WEALTH 

prove that it is wicked to save something out of the 
small businesses that are unable to operate economi- 
cally or efficiently and to give the public the benefit of 
the increased economy and efficiency that result from 
consolidation and the cutting out of the cost of dupli- 
cated service? 

I have in mind, two municipally-owned lighting 
companies, where the municipalities found it impos- 
sible to get enough business to pay the expenses of op- 
erating their separate power houses much less to pay 
the interest on the city investment in the plant. They 
sold out to the privately-owned company and saved the 
city the deficit from operation, paid off the bonded debt 
created for the construction of the plant, relieved 
the taxpayers from the interest on this debt, and by 
giving the privately-owned company a much increased 
volume of business without increasing its plant or 
cost of operation, enabled it to furnish service at r 
lower rate and still make a good profit on its capital, 
which it had not been able to do before. 

Socialistic legislation has attempted to dictate the 
terms on which private capital might engage in public 
service, but the experience of the people with this 
sort of legislation has shown conclusively that private 
capital cannot be compelled to furnish public service on 
terms that are not satisfactory to it. While the attempt 
of a community to make compulsory levies upon cap- 
ital in the nature of taxation in order to furnish this 
public service through municipal plants has resulted 
in capital fleeing from the community and so leaving 
the community poorer than it was before. 

If I and my friends together, raise a million dollars, 



THE CRITICS OF WEALTH 89 

and we have the choice between putting that money 
into a manufacturing plant, or in the building of a 
light and power plant from which to serve the public, 
why should we be limited in our profits in the public 
service investment, while our profits in the manufac- 
turing business would be limited only by our ability 
to turn out goods and sell them at a profit? How much 
public service do you believe the people would get if 
we were limited to six per cent, on our investment, if 
it were spent in public service, while we might easily 
make one hundred per cent, if we spent it in manufac- 
turing goods to be sold to the very same people, who 
would use the service of our light and power plant if 
we invested the money in that line instead? 

M. Georges Aubert, a prominent French banker, in 
some economic studies, published some years ago, after 
an exhaustive investigation of the business of America 
compared to the business of Europe, said : "The great 
business corporations of America do the maximum of 
business because they have the maximum of quality 
and the maximum of power to produce. It is impos- 
sible to dream of their eventual disappearance, on the 
contrary, they must grow more and more." 

Discussing the growth of wealth in America, and 
its causes, M. Aubert said : "The American has one 
enormous advantage over the French and English, and 
over Continentals, he works in a land where everybody 
succeeds; where prosperity is unceasing; where the 
unfortunate, as we know them in Europe, do not exist ; 
where people unlucky in business, even those who 
have failed in business, get back on their feet again 
without loss of time, a thing utterly impossible in 



90 A DEFENCE OA WEALTH 

Europe. In this, the American is aided by the very- 
great freedom given under the American laws to all 
American citizens, in civics as well as in commerce 
and finance, while our French laws are based upon the 
permanent control of the individual in all of his mani- 
festations." 

Wherever government interferes to control or to 
regulate, it hinders production, hoards product, im- 
pedes distribution and prevents consumption while 
the hoarded products spoil and waste. 



Chapter VII 



C^^ 


M 



THE AMERICAN ATTITUDE TOWARD 
WEALTH 

Can We Buy Peace by Paying Blackmail? 

HE reason for the great prosperity and de- 
velopment of the United States has been 
that in spite of all uneconomic legislation, 
no nation has been so protected from So- 
cialism by its fundamental law or has given such pro- 
tection to private property as we have here in the 
United States. The provisions of the Constitution 
operated to protect the thrifty and the industrious until 
the recent Amendment providing for the Income Tax, 
which was so loosely drawn as to open the door not 
only to the confiscation of income but to the plunder 
of the property itself from which the income is de- 
rived. 

In Europe the system of property ownership was 
based on the protection of the occupant of the land 
from raids and wars, and so the occupier of land paid 
to a military overlord a share of the product in return 
for this protection. This is what we call the Feudal 
System, but in our Colonial days the settlers had no 
military overlord. They did their clearing and farm- 
ing with their rifles at hand, and when necessary volun- 
tarily organized themselves into bands either to drive 

91 



92 A DE FENCE OF WEALTH 

the Indians farther away or to punish them for their 
attacks, and gradually as population became thicker 
and it was not necessary for all able-bodied men to 
engage in this work of protection, they taxed them- 
selves voluntarily and used the proceeds to pay pro- 
fessional soldiers to protect them. 

When our Government first established itself, prac- 
tically every adult male in the Colonies was either an 
owner of land or expected soon to be, consequently in 
the formation of the Federal Constitution the rights 
of the owners of land were carefully protected, and 
nothing was incorporated in it that would operate to 
discourage the individual initiative necessary to in- 
duce young or courageous men to go Westward into 
the wilderness and by their individual industry create 
values out of lands that were unoccupied and valueless. 

Most of the older men, who were members of the 
Constitutional Convention, had done the same thing 
with the land they then held, and with a knowledge 
of how the overlords of Europe not only claimed title 
to the land but freely dispossessed therefrom tenants, 
who had so long occupied it and cultivated it as to 
become to all intents and purposes the owners thereof, 
they carefully protected themselves from any such 
system ever becoming prevalent in this country by pro- 
viding that none of the private property which they 
had created out of a wilderness should be taken with- 
out due process of law and compensation. The ex- 
perience of the Race with all governments recorded in 
history had proven the wisdom of such a provision, 
and they did not intend that the government which 
they were setting up should ever have the right under 



AMERICAN ATTITUDE TOWARD WEALTH 93 

any pretext of necessity to adopt or pursue a policy 
of confiscation. 

The experience of this country of ours in the past 
four years has shown how quickly the Government 
has done exactly this thing as soon as the protection 
provided in the original Constitution had been waived. 

Another thing which our forefathers provided 
against was the prevention of that system, so preva- 
lent in Europe, of declaring political revolutionists 
outlaws and confiscating their property to the exclu- 
sion of their heirs. So the founders of this country 
provided that there should be no attainder of blood 
that would prevent the inheritance of property by the 
heirs of any man. 

It was with an eye to the experience of private in- 
dividuals under monarchial governments that made 
the drafters of the Constitution provide that no law 
should be passed impairing the obligations of contracts, 
so when a contract was made and the consideration 
paid, an individual had a right to depend upon its 
terms being carried out. It is foolish indeed for politi- 
cal philosophers to pretend that this provision was 
never intended to apply to contracts between the 
people on one hand and individuals who contract to 
supply them with service on the other. 

People who rail at corporations fail to realize that 
the first corporations here, as well as in Europe, were 
Church Organizations, and then Monastic Orders and 
Educational Institutions. The Dartmouth College Case, 
which laid the foundations of corporation law in this 
country, involved the rights of men associated for the 
purpose of conducting an educational institution and 



94 A DEFENCE OF WEALTH 

not a business enterprise for profit. It has been 
argued that had the case been otherwise the decision 
would have been the reverse, but what else could 
Judges with consciences do but decide as they did, and 
hold that when a group of individuals applied for a 
charter to conduct a corporation for a certain purpose 
and the State then granted that charter, that the 
charter when so granted constituted a contract 
between the State and the men composing the cor- 
poration, that they should and could conduct the enter- 
prise or business as provided in the charter. 

The provision of the Fourteenth Amendment, assur- 
ing civil rights to all persons and denying to the State 
the right to treat individuals in unequal ways, was 
right then and right now, and it really should be in- 
voked at the present time to protect the unequal taxa- 
tion of property when held by individuals in their own 
names and when held by the same individuals through 
the medium of a corporation. Nobody would have 
dreamed a few years ago that anyone would seriously 
propose a few years later to plunder and deprive part 
of our citizens of their civil rights or that property held 
by a group of individuals unpartitioned would be taxed 
differently than the same property if divided up among 
persons interested in it in proportion to their interest 
therein. These provisions and amendments were for 
the purpose of insuring a fair deal and equal treat- 
ment to all property, and under such laws it was im- 
possible for grafters and socialists to oppress it. The 
modifications have been secured by demagogues to en- 
able the political grafters to get at it. 

When our Constitution was adopted this country was 



AMERICAN ATTITUDE TOWARD WEALTH 95 

poor and every one knew and appreciated the need 
for increased production and of thrift and saving in 
order to create the capital for further development. 
This was the reason why such protection was insured 
toward accumulated surplus and the evidences of in- 
dustry shown in the improvement of unimproved land, 
but it is not true that the Constitution gave any special 
privileges or powers to property. It only insured 
equal treatment to property and ignored entirely the 
fact that it might be owned by an individual or by sev- 
eral individuals associated in a corporation. If ever a 
Constitution justified itself, it is ours by our growth 
of prosperity under it. 

It has been claimed that the Government in our 
Constitution, attempted to divide the powers between 
property owners on one hand and the non-property 
owning voters on the other hand, but this is not so; 
the drafters of the Constitution did not recognize the 
fact that there could be non-property voters, but only 
that there might be the ignorant and unthinking on one 
hand and educated, responsible people on the other. It 
recognized the necessity of conserving property and 
making it worth the individual's while to create prop- 
erty, so the Constitution carefully forbade either the 
legislative authorities or the executives from inter- 
fering with the rights of property, however held. This 
protection assured to property by our fundamental law 
made it safe for every individual in our country to 
engage in creating property and it has been due to this 
policy that we have grown in a hundred and thirty 
years to become richer than all the countries of Europe 
combined with their population four times greater 



96 A DEFENCE OF WEALTH 

than ours, and their thousand years of production 
and accumulation behind them. What Americans 
should realize is that Europe has become intensely 
jealous of our prosperity and that the recent propa- 
ganda attacking wealth has originated in Europe, and 
is being urged here in an effort to destroy our pros- 
perity, eliminate the theory of government on which 
our practice is founded, and drag us back to a par with 
Europe. 

Ferrero, the Italian Historian, after an exhaustive 
investigation and study of conditions in America, de- 
clared that: "The great growth of wealth in America 
has been due to the freedom and private initiative 
granted to individuals which was the underlying prin- 
ciple of the American constitution, while in Europe 
personal freedom and private initiative is limited on 
every hand by the control which the State retains over 
all enterprise." He was particularly impressed by the 
fact that the richest man in America, Rockefeller, 
lived in a perfectly plain five-story brick house in a 
side street in New York, which an ordinary merchant 
of Europe would scorn to live in ; that the residence 
of Mr. Morgan was small and unpretentious and 
could not have cost a fraction of what he had spent on 
his library ; that although Carnegie had built libraries 
like palaces all over America he lived in a house 
which an ordinary European nobleman would scorn, 
and that nowhere in America did he find anything to 
compare with the hundreds and hundreds of palaces 
built by royalty and nobility in Great Britain and the 
countries of Europe. He noticed another thing : wher- 
ever he went in America among the homes of th^ 



AMERICAN ATTITUDE TOWARD WEALTH 97 

rich, he saw many books and great libraries, and much 
of the world's finest art, but few jewels. 

There has been much talk of privileged classes and 
piling up of wealth through privileges, but I have 
never yet seen a single one of these protestants, who 
was able to mention a single privilege that any man 
held. The truth is that there is no such thing as 
privilege, except a privilege to work and a privilege 
to serve others by doing for them what they are un- 
able or unwilling to do for themselves. It is common 
to refer to the laws as having granted privileges to 
someone, but the truth is that the laws have never 
granted privileges, but have always been attempting 
to interfere with natural equality, or economic laws, 
by attempting to take away from successful individuals 
the right to do the things which they have learned to 
do better than anyone else. It has been pretended by 
a school of political philosophers that the protective 
laws in this country were for the benefit of the wealthy, 
but it is not true. Protective laws operate not for the 
benefit of wealth or of capital but for the benefit of 
labor, and there is not a possessor of wealth or capital 
who does not know that he would be richer and 
better off if all protective laws were repealed and 
there was free competition of labor throughout the 
world. 

The folly of those who pretend that the fortunes of 
American manufacturers are due to privilege is shown 
in the fact that in this country, Socialists claim that 
the high tariff that has built up industry has been re- 
sponsible for the grinding down of labor and the 
creation of unearned fortunes for the manufacturers 



98 A DEFENCE OF WEALTH 

in protected industries. But the disproof of the pro- 
tective tariff as a reason for creating the fortunes 
made by those engaged in these industries is shown 
by the fact that fortunes just as large have been 
and are being made in Great Britain by the manu- 
facturers in the same line under the conditions of 
free trade, and that the same conditions which laborers 
here complain of as being due to a protective tariff are 
complained against by the laborers of Great Britain, 
who lay their conditions to the evils of free trade. The 
truth is that privilege has nothing to do with the 
condition of labor in either place but is due to the 
ignorance and thriftlessness of labor itself, while 
neither protection in America nor free trade in Eng- 
land, prevents men of managerial ability from manu- 
facturing their goods and selling them at a profit. 

The attacks of demagogues and agitators; upon 
wealth and capital has always been professedly based 
on the pretended crimes and misdeeds of wealth and 
capital, but in truth, they have never been anything 
else than blackmailing expeditions on the part of 
legislators and politicians back of them. 

Missouri, bringing its well-known and widely adver- 
tised suit against the Standard Oil Company, exulted 
over the judgment of ouster, but when the Standard 
Oil Company started to tear down reservoirs which 
could not be sold, and to demolish its hundreds of sta- 
tions, and to discharge its thousands of employees, 
the State realized that the injury to itself was far 
greater than any possible injury to the Standard Oil 
Company, and so instead of enforcing its judgment of 
ouster, which it had secured on professedly high moral 



AMERICAN ATTITUDE TOWARD WEALTH 99 

grounds, it proceeded to dicker like the blackmailer, 
which it was, over the payments and terms which the 
company should make for the privilege of continuing 
to serve and enrich the inhabitants of the State. 

Arkansas brought suits for penalties aggregating 
sixty-five million dollars against sixty-five insurance 
companies doing business in that State, but when the 
companies instead of offering to pay, withdrew from 
business in the State, and the citizens found it impos- 
sible to secure insurance, the blackmailing suits were 
abandoned. 

Kentucky sued the Southern Pacific for four mil- 
lion dollars. Texas collected a fine of two million dol- 
lars from the Waters-Pierce Oil Company, and the 
United States Government, advertising widely the 
alleged frauds of the American Sugar Refining Com- 
pany started the suits that it brought against that com- 
pany for two million dollars, but carefully concealed 
from the people the fact that, during the period cov- 
ered by the alleged irregularities, the Sugar Com- 
pany had paid without question, three hundred and 
thirty-four million dollars of duty and that the amount 
involved in the so-called "irregularities" was less than 
two-thirds of one per cent. 

The attempt to attack corporate wealth has led to the 
passing of some of the most extraordinary laws ever 
conceived by disordered human minds. In Kentucky, 
a law was passed prohibiting any railroad from owning 
or operating more than a single bridge across the Ohio 
River, and having passed the law, the Louisville & 
Nashville Railroad was thereupon indicted for owning 
two bridges across the Ohio, although one of the 



100 A DEFENCE OF WEALTH 

bridges was at Cincinnati and the other one at Hen- 
derson, Kentucky, two hundred miles farther west. 
The Delaware, Lackawanna & Western Railroad was 
indicted, convicted and fined two thousand dollars for 
hauling hay over its own road to feed the mules that 
were working in its mines, and the Chicago & Alton 
Railroad was fined thousands of dollars for hauling 
freight at a rate that had been published and in use for 
fourteen years. 

Not content with passing laws that make crimes out 
of conducting business in the usual way, both Con- 
gress and state legislatures have passed laws which 
business men simply cannot comply with, but in the 
enforcement of these laws it has been shown plainly 
that they have been passed for the purpose of plunder- 
ing the industrious and thrifty and the skillful. (Wit- 
ness the penalty imposed on all educated professions 
in the last income tax law.) In principle, these laws 
have been the same as if a group of pygmies had 
passed a law making it a capital crime for any man to 
grow over six feet high, on the ground that a giant of 
that size would be dangerous to the safety of the little 
men, or for a race of lightweights to pass a law mak- 
ing it a crime for any man to weigh over two hundred 
pounds on the theory that no one could weigh so much 
without eating more than his share of food and becom- 
ing stronger than it was safe for the rest of the light- 
weights to have around, or for a race of men with 
defective vision and deaf ears to pass a law making it 
a crime for any one to see over a mile, or to hear calls 
or sounds from a distance of over a thousand yards, 
because, anyone with such excellent vision or good 



AMERICAN ATTITUDE TOWARD WEALTH 101 

hearing was unfairly endowed considering the handi- 
caps of his associates. 

It costs four times as much in proportion to haul a 
train of broken car lots as it does to haul a solid train 
of wheat or packing house products, but the small 
dealer, who for lack of capital or business ability is 
compelled to do his business on a half-carload basis, 
protests against his wealthy competitor receiving a 
freight rate on his trainload that is economically justi- 
fied, and the unthinking masses of the people listening 
to his clamor believe, or at least pretend to believe, 
that to give the big shipper the rate which his business 
warrants is giving wealth an unfair advantage over the 
poor little shipper. If the unthinking masses would 
only stop to consider, they would realize that they have 
not only done an uneconomic thing in prohibiting a low 
rate to the big shipper but that they have done a foolish 
thing in charging themselves more than they ought to 
pay for shipping what they use, in order to keep alive 
a little business man, who from an economic standpoint 
should be driven out of business. In other words, the 
masses of the people listening to the clamor against 
wealth have needlessly imposed upon themselves the 
burden of supporting a great mass of incompetent, 
inefficient and uneconomic businesses, that are able to 
live only by reason of charging the people more than 
the people ought to pay, and they have by their attacks 
upon wealth and their uneconomic legislation directed 
against wealth and capital deprived themselves of the 
economical and efficient service that can only be theirs 
through the instrumentality of large wealth. 

The unreasonableness of the regulation of railroad 



102 A DEFENCE OF WEALTH 

rates, or of the rates for electric light and power, or 
gas, is shown when you attempt to carry the principle 
into other fields. Everyone knows that efficiency of 
railroad management had resulted in great reduction in 
railroad rates, and that new discoveries and new ma- 
chinery, which have been possible only by the use of 
large wealth and capital, has not only made much 
better the lighting facilities but greatly reduced their 
cost to the masses of the people, who are their users. 
But although farm machinery has been greatly im- 
proved and plows and tractors have made culti- 
vation cheaper, while binding harvesting machines 
have greatly cheapened the cost of harvests, and 
threshing machines and flour mills have cheapened the 
cost of threshing the wheat and turning it into flour, 
the price of bread is higher than it has ever been in the 
history of our country. 

The farm upon which the wheat of this country is 
raised did not cost originally to exceed over one dol- 
lar and a half an acre, so with cheap land we have the 
first factor warranting a demand for cheap flour, and 
it can easily be shown that with the perfection of farm 
machinery it costs scarcely twenty per cent, as much to 
raise wheat as it used to cost. It would, therefore, 
be far more reasonable to pass a law declaring that the 
price of wheat should not exceed sixty cents a bushel 
and should be reduced two cents annually until the 
price of thirty-five cents a bushel had been reached, 
than it is to pass a law declaring that the price of gas 
should be one dollar per thousand feet and be reduced 
five cents per annum for the next four years, or that 
the price of electric current should be 10 cents a kilo- 



AMERICAN ATTITUDE TOWARD WEALTH 103 

watt and should be reduced one cent a kilowatt annu- 
ally for the next four or five years. 

The public has seemed to think that having once in- 
duced the investment of wealth in public enterprises 
it has had that wealth where it could not afterwards 
withdraw either from public service or from public 
plunder. But in some communities at least the plun- 
dering public is learning otherwise. Hostile legisla- 
tion, the forcing by law of high wages on public utility 
corporations, and the denial of living service charges, 
forced the closing down and dismantling of not less 
than forty public utility properties in the United 
States last year, involving in the aggregate, several 
hundred miles of electric railroad and considerable 
withdrawals of service even for light and power. This 
should be a warning to the public, for it is only a 
question of time when the properties which are still 
able to exist will, if further plundered, be compelled to 
follow those that have ceased business and with- 
drawn their public services. 

The creators of wealth, and the builders of hospitals 
and libraries, are frequently criticized on the score 
that they are building monuments to themselves with 
money that should be distributed among the poor. But 
the truth is that money distributed among the poor 
without the poor doing anything in return for it, is 
money that might just as well be burned up, for if it 
feeds the poor in idleness, it simply adds to their help- 
lessness and their feeling that they should be sup- 
ported out of charity and do nothing to help them- 
selves. The best possible way of giving to the poor 
is to use surplus wealth and capital in the construction 



104 A DEFENCE OF WEALTH 

of great public works, where any and all men seeking 
work can come and find something to do, and taking 
home his wage at night, he can feel that he at least has 
done something to earn what has been given to him, 
while had it been distributed among the "poor," every 
recipient of the gift would have known that he had 
done nothing to deserve it. 

The "Independent" in an editorial not long ago, de- 
clared that : "It was the business of the voters to see 
to it as rapidly as possible that the Supreme Court be 
constituted of men capable of grasping the idea that 
property, like the Sabbath, was made for men and not 
men for property." This demagogic statement ignores 
the fact that all property is the creation of some man 
and is in the possession of the man who creates it, or 
of the man who takes care of it, not of he who wastes 
it. A fool and his are soon parted, whether his 
property be money or cattle or lands, and the school 
of agitators who are so virtuously attacking wealth are 
simply urging that instead of the responsible and con- 
servative people controlling government and property, 
all those of abihty shall be deposed in favor of the 
irresponsible, the thriftless, the ignorant, and the 
vicious, hoping doubtless to see repeated in this coun- 
try the debacle now being carried on in Russia. 

Those who feel that there is an unequal distribution 
of the surplus product of the world, and who argue 
that it should be re-apportioned or destroyed, ignore 
the fact that in a world where all the individuals are 
to share equally, it involves a sharing of the losses as 
well as the profits, and that any one who devoted his 
time to unproductive labor or to a hunt that failed 



AMERICA!^ ATTITUDE TOWARD WEALTH 105 

would be entitled to share the product of productive 
labor. This labor has never been willing to do even if 
it were able, which it is not, for it is never in possession 
of sufficient surplus to care for itself through a period 
of idleness much less take care of a fellow-worker 
who found that his crops had failed because he neg- 
lected to plow, or that his hogs had died in an epidemic 
because he refused to innoculate. If you cannot share 
losses, you have no equitable claim to share profits. 

A recent editorial declared that : "The criticism of 
government management of railroads is chiefly due to 
the increased wages for workers." It shows that the 
increase of wages since the government took over the 
management of railroads, amounting in the aggregate 
to over Eight Hundred Millions of Dollars, amounts 
to an increase of Four Hundred Dollars per year to 
each employee of the railroads, and then attempts to 
show that this increase is only costing the rest of us 
about ten dollars apiece per year which, added to our 
present cost of living, it argues, is so small that we 
have no right to complain. 

Now if the Four Hundred Dollars a year increased 
wages to each railroad employee had been made pos- 
sible by some extra efficiency on the part of these em- 
ployees or by some increased service to the rest of us 
there would be some excuse for the raise of wages, 
but when it has been clearly shown that the increase in 
wages was granted to the railroad employees in re- 
sponse to a blackmailing threat on their part that they 
would deprive us of railroad service, and when as has 
been demonstrated the increase in wages has resulted 
only in additional demands and threats, and in de- 



106 A DEFENCE OF WEALTH 

creased efficiency and less train service, then the rest 
of us have a right not only to demand that the wages 
be reduced to where they were before, but that they 
be reduced still lower to the point where they are no 
more than an equivalent for the service that these rail- 
road employees are grudgingly rendering to the rest 
of us. 

The same paper further argues that this $800,000,- 
000 a year in increased wages to railroad employees is 
rapidly spent. "What becomes of this billion dollars," 
it asks, "do the railroad employees hoard it or store it 
away or invest it and become plutocrats ? Not at all," 
it answers, "they get it on Saturday and on Monday 
they, and their wives spend it, leaving nothing out of 
the sum added to the accumulated surplus of the coun- 
try." On the other hand, it argues that if this $800,- 
000,000, or billion dollars, a year, was saved as the 
result of efficient operation and added to the dividends 
of the railroads, the money would go into the banks to 
be stored away and added to the fund of those who 
already have enough. Good pay, it argues means good 
times, and it claims that all great national enterprises, 
railroads, telegraph and telephone lines, public works, 
city enterprises, street cars, electric lights, etc., can pay 
the highest wages without increasing the charge to the 
public. 

It ignores entirely the fact that these great enter- 
prises, which it now wants to be plundered for un- 
earned wages for employees, could never have been 
built in the first place, had it not been for accumulated 
wealth, and that the attacks on accumulated wealth, 
the confiscation of incomes and the plunder of private 



AMERICAN ATTITUDE TOWARD WEALTH 107 

property by recent socialistic legislation has so put a 
stop to the production of surplus and the accumulation 
of wealth, that there is now no wealth or capital for 
the further construction and extension of these great 
enterprises ; that not only are new enterprises being 
built nor are existing ones being expanded, but that it 
is impossible to raise capital for the maintenance of 
these great enterprises which are rapidly deteriorating 
and failing in their public services to such an extent 
that it will not be long until they will be unable to 
employ anybody to pay any wages, much less the in- 
flated, unearned wages, which are now forced out of 
them by blackmailing, socialistic and plundering legis- 
lation. 

The recent tax legislation passed by Congress was 
a deliberate attempt to plunder capital, or accumu- 
lated wealth, and in spite of the fact that the Supreme 
Court twice over-ruled this deliberate blackmailing 
legislation, Congress for a third time attempted to do 
the same thing. In the past two years the taxes paid 
by the United States Steel Corporation have been 
$507,754,000, or a sum greater than its entire common 
stock issue; greater than the total revenue of our na- 
tional government for any year before the year 1900. 
Such taxation amounts to nothing less than the con- 
fiscation of property, or wealth. 

While the rights of property were respected, con- 
struction, new buildings, development, characterized 
the growth of New York City, but recent taxes have 
so plundered property owners in this city that new 
construction and development have come to a stand- 
still. 



108 A DEFENCE OF WEALTH 

Similar legislation applied to railroads long ago 
stopped any further railroad enterprise, and the pres- 
ent legislation if not immediately repealed will kill all 
industry and initiative in this country. What induce- 
ment is there to do business or to promote new enter- 
prises for the employment of labor, if not only all 
the income but the principal itself is to be taken for 
the payment of wages and taxes? Under present 
conditions few will undertake new business, and then 
only in those lines which constitute nothing more or 
less than a gambler's chance, with probably a greater 
likelihood that they will lose the capital hazarded than 
that they may make anything. 

There is no pretense on the part of the great rail- 
road labor unions that their abnormal wages have been 
secured or can be retained except by threats, and by 
the actual destruction of property, if their threats are 
not considered. Mr. Garrettson, the spokesman for 
the railroad brotherhoods and unions, in a recent in- 
vestigation before Congress, testified as follows : 

"Any attempt to reduce wages is going to strengthen 
the avowed forces of discontent. As one who knows 
the danger this country is facing, I tell you we are as 
near a powder mine as one can imagine. Unless we 
are prepared to rectify conditions to a very consider- 
able degree, we shall only add to the strength of the 
flame which at last must communicate itself to a suffi- 
cient body of the people as to upset that which has been 
created by the fathers, who set up this government." 

In other words, the railroad union deliberately 
threatens the rest of us that if we do not submit to 
their demands, they will start a revolution and over- 



AMERICAN ATTITUDE TOWARD WEALTH 109 

throw not only our government but our form of gov- 
ernment. 

When the construction of railroads was originally 
begun, it was undertaken by the people who had such 
wealth as then existed. They believed that it would be 
a profitable investment for their surplus savings, to 
serve the people of the country at large by giving them 
cheaper and better transportation, but after they had 
invested their money many times not only without 
profit but often with actual loss, a school of political 
philosophers arose, who argued that these invest- 
ments could not be regarded as intended to be profit- 
able to the people who put up the capital that made 
possible their construction, but that the construction 
of railroads was solely for the benefit of the general 
public and that cheap transportation should be fur- 
nished to the general public regardless of whether it 
paid any return to the capital expended in the construc- 
tion of the railroads or not. 

This school of "Economists" has now been super- 
seded by another, which pretends to believe that the 
railroads were built, neither to secure a profitable re- 
turn for the capital invested nor to render cheap and 
efficient service to the public, but solely for the benefit 
of those employed in running the railroads and that 
they have the right not only to deprive the capital in- 
vested of any return but to raise the rates paid by the 
general public regardless of the service furnished, or 
its efficiency, and to distribute the proceeds of the in- 
creased rates among the bandit unions which have 
seized possession of the railroads, and which threaten, 
if they are not permitted to hold up the entire country 



110 A DEFENCE OF WEALTH 



for their own benefit, that they will not only deprive 
the country at large of railroad service but will destroy 
the railroads themselves. 



Is 


^ 


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^™ 


^^ 


^ 



Chapter VI II 

DESTROYERS OF WEALTH 

Shall Those Who Choose Not to Work Be Permitted to 

Live by Plunder? 

HROUGH all the material progress of the 
Race the instincts of the human individual 
have remained the same. The motives 
moving man today are identical with those 
that stirred the primitive man. It has always been the 
instinct of the savage, of the child, of the ignorant, 
and the superstitious, to destroy that which they can- 
not understand. This instinct is directed not only to 
the destruction of physical objects, but to the destruc- 
tion of individuals, who have thoughts and who teach 
ideas beyond the comprehension of the ignorant and 
superstitious. 

It is this primitive instinct which is at the bottom 
of race antipathy, each clan, tribe or race, hates and 
strives to destroy those who are unlike themselves. It 
is this same instinct which makes the thrifty dislike 
the unthrifty; which makes the lazy hate the indus- 
trious ; which makes the unclean despise the clean. It 
is hard to recognize these primitive instincts today, for 
our civilization is so complex, so elaborate, so ornate, 
so decorative if you please, that it lends itself to pro- 
Ill 



112 A DEFENCE OF WEALTH 

tective "coloring." It offers the wolf, the fox, the 
weasel, the hog, and the jackal, many disguises. 

But if you want to understand the conflicts and the 
problems of the present day, it is only necessary to 
strip away the camouflage of civilization. Reduce the 
problem to its primitive terms, strip it of its disguises, 
and you will recognize it at once. You will find your- 
self confronted by the world-old problem : 

SHALL THOSE WHO CHOOSE NOT TO 
WORK BE PERMITTED TO LIVE BY PLUN- 
DERING THOSE WHO DO WORK AND WHO 
SAVE, OR ATTEMPT TO SAVE, THEIR SUR- 
PLUS PRODUCT IN ORDER TO GAIN TIME 
TO THINK? 

The most primitive instinct of all is to seize what 
one desires rather than to work to create it. The 
present attacks upon wealth simply show the primitive 
savagery and economic ignorance of those who advo- 
cate the seizing and appropriating to their own use 
that which has been made or saved by others. 

Those who attack corporations are like the foolish 
savage who smashes a fine watch because he cannot 
understand the cause of the ticking inside and does 
not care to know any distinction of time between sun- 
rise to sunset. 

The attacks upon wealth must be judged primarily 
not on their ethical unsoundness, nor by the hardship 
that they impose upon the possessors of wealth and 
the individuals who have practiced thrift for one or 
more generations, but by their result to and effect 
upon the idle and ignorant mass of people, who have 
done nothing of themselves to create or to assist in 



DESTROYERS OF WEALTH 113 

creating the wealth that having enjoyed they are now 
attempting to destroy. If it could be shown that 
the condition of the ignorant, uneducated, and ineffi- 
cient mass of the people was actually better by the 
destruction of wealth, created and conserved by the 
efforts of others, they would be as justified in destroy- 
ing it as they would be and are justified in destroying 
dangerous wild animals, or the other things of nature 
that are destructive of human life. But the facts are 
that wherever wealth, or the thing created by wealth, 
has been destroyed, labor, itself, has been the worst hit. 

The use of wealth in production has increased the 
opportunity of employment for the masses, it has 
furnished them with facilities for creating more prod- 
uct with less physical labor; it has raised their 
standards of living; it has reduced the cost of the 
product to the consumer and immeasurably improved 
the quality of the product. It has so multiplied the 
Race's power of production that the poorest laborer 
is now able to live in substantial houses with pure 
water on tap, with bath-rooms, with electric light, with 
a fuel economical beyond human dreams, all of which 
were unknown to and impossible to be secured by 
Kings and Princes up to a hundred years ago, and the 
only possible effect of the destruction of wealth would 
be to rob the masses of these comforts and more or 
less reduce them to a primitive state of existence. 

The attitude of Labor towards Wealth is like that 
of the degenerate who after having ravished his beau- 
tiful victim deliberately destroys her. 

The masses, who are engaged in attacking and de- 
stroying wealth, profess to believe that all property is 



114 A DEFENCE OF WEALTH 

theft, and Lenine and Trotsky, both German followers 
of Marx, who first really attempted to justify this 
principle, are giving the world a practical demonstra- 
tion in Russia of the truth or falsity of the Marx 
theories as to who are the creators and the proper 
conservators of wealth. 

A sympathetic German observer, Hans Forst, who 
has been investigating conditions in Russia, reports : 

*'At every corner in Petrograd and in Moscow, so- 
called ^Liquidation Bureaus' have been established, in 
which household goods of all kinds, furs, clothing, 
linens, furniture, objects of art and antiques, are sold 
at ridiculously low prices, if indeed, they can find a 
purchaser at all, for who cares to buy when the requi- 
sition and confiscation of the furnishings is in full 
swing? If purchasers are found at all they are specu- 
lators who hope to hide the cheaply-purchased articles 
until other times, or who understand even now how 
the goods may be gotten abroad by bribing and smug- 
gling. Great consignments of these liquidated Russian 
antique rugs, works of art and jewels have gone 
across the seas on Swedish ships. 

*'The only possibility of improving the conditions of 
the working classes is by increasing production, but 
the productivity of labor has sunk lower and lower by 
degrees. To conserve the food supplies of the city, 
the council of the people, the commissioners, passed a 
resolution ordering into exile out of the city the so- 
called 'parasitic elements,' capitalists, manufacturers, 
bankers, property owners, merchants, and all persons 
who had no specially paid work. But the social revo- 
lution in Russia has begun to realize that socialism 



DESTROYERS OF WEALTH 115 

instead of organizing production has taken possessions 
from their owners and divided it among the masses of 
the poor, but this cannot last much longer, and the 
working class are beginning to realize that they will 
have to starve and freeze in the dwellings of the rich 
as long as this economic destruction continues. The 
working men everywhere complain bitterly that though 
everything belongs to them they are unable to get a 
living." 

Doctor Ross, investigating the conditions in Russia 
since the Bolshevik control has been in force, says: 

"Not only was the working day shorter but it was 
broken by tea-drinking, smoking, chatting and political 
discussion. Whenever they felt like it the men held a 
meeting; they would leave their machines to talk poli- 
tics. The men usually required a time-wage to be sub- 
stituted for piecework, and at once there was a marked 
falling off in productivity. 

"In last July (1918) the output per man in the 
munition factories of Petrograd was only one-quarter 
of what it had been before. The labor men, them- 
selves, frankly admitted the great slump in produc- 
tivity but said it did not all lay in labor, part of it was 
due to the gradual depreciation of machinery and to a 
decrease in the supply of raw materials, which of 
course simply meant that the producers of raw ma- 
terial were falling off in their productivity as were the 
factory hands themselves. The *Boss' could do little 
to speed-up his men for he possessed no power. The 
workmen had perceived the necessity of protecting 
their spokesmen and leaders from the resentment of 
the boss, so his right to discharge any man was sub- 



116 A DEFENCE OF WEALTH 

jected to the veto of a committee of the factory work- 
ers themselves. In one factory the workers drove their 
manager out, but a week later, implored him to come 
back because they knew not where to buy additional 
raw material or what kind to order. In another case, 
the owner of a factory was driven away by the work- 
men who took over the plant for their own benefit and 
attempted to run it. When they had used up the 
supplies of raw materials on hand and sold the manu- 
factured product and appropriated the proceeds for 
themselves, they found themselves without means for 
buying more raw material for manufacture. They then 
began to sell machines out of the works to get the 
means for buying more raw material but when they 
had secured the raw material they found that they had 
sold some of the machines necessary for working it 
up and that their factory was useless." 

This report is made by a man who has lost at least 
one university position on account of his advocacy of 
socialistic principles. 

The consideration accorded to striking union labor 
in our country during the war has been an invitation 
to Bolshevism. When labor threatened to strike, with 
threats of sabotage and actual attempts at it and the 
Administration compelled employers to raise wages as 
it had before compelled the railroad companies to 
raise them by the passage of the Adamson Law, it 
convinced union labor that the Government was afraid 
of it, and it proved to labor that it needed only to 
repeat this threat of strike with threats of sabotage, 
to gain other and additional increases. This it pro- 
ceeded to do, until now it is impossible for manufac- 



DESTROYERS OF WEALTH 117 

turers to find any market for goods made by labor at 
the present scale of wages, and labor, when it finds 
that threats are powerless to secure additional raises, 
will be compelled to make good on its threats and 
practice sabotage, and once the destruction of property 
begins the reign of Bolshevism is at hand. The in- 
creases of wages granted to union labor under threat 
in the last three years are nothing more or less than 
ransoms paid for immunity from bandit attack like 
those paid to Mexican Revolutionists, who are patriots 
for plunder only. It has been like turning over to 
highwaymen your pocketbook and jewelry under thfeir 
threat of taking your life ! 

The editor of the ^'Marine News" is authority for 
the statement that during the past year (1918) ship- 
yard labor of the United States averaged twice the pay 
that it did four years ago and that the output of the 
men averaged only fifty-five per cent, of what it did 
before the war broke out. Double pay and only half 
as much produced, or a cost per unit of production, 
four times as great. 

Mr. Peiz, the Director General of the Emergency 
Fleet Corporation, declared that : "Labor had been de- 
liberately slack during the war. In the Atlantic Coast 
shipyards workmen received $2 for the same time 
that a year ago brought only $1, but that the individual 
output was only two-thirds of what it had been a year 
before." So that the unit of cost production during 
the war was only one-third what it was at the be- 
ginning of the war. In other words, bandit labor 
compelled us to spend three times as much of the na- 
tion's wealth, or accumulated surplus, to produce our 



118 A DEFENCE OF WEALTH 

war material and defeat our enemies, as it would have 
cost had labor worked honestly and patriotically for 
the wages that it was receiving at the beginning of the 
war. 

It must be recognized that what was produced by 
labor for war purposes was produced for the purpose 
of destruction, and most of what was produced, either 
was destroyed or will be practically destroyed by being 
junked, as it has no otherpurpose except for war. If, 
therefore, labor had been willing to work for what it 
got before the war, only one-third as much of our 
national capital or wealth would have been consumed 
or destroyed by the war as was consumed and de- 
stroyed, and our national debt instead of being $25,- 
000,000,000 would only be eight or nine billion dollars. 
But labor deliberately blackmailed every man who had 
a savings-bank account or a home or property of any 
kind and compelled us to mortgage our homes, our 
properties, our business and our income for the rest 
of our lives in order to pay to union labor blackmail- 
ing wages that amounted to substantially twenty-five 
billion dollars. 

One of the results of this blackmailing on the part 
of labor has been the construction of a fleet of ships 
by our Government at a cost of from $200 to $300 
per ton, while England is producing ships at a cost of 
$50 per ton, and Japan at a cost not much in excess of 
$40 per ton, and yet some demagogues are pretending 
that it will be possible to operate these ships built at 
such extravagant costs and compete with England and 
Japan for the carrying trades of the seas. It is a safe 
prophecy that not one ship of these built by black- 



DESTROYERS OF WEALTH 119 

mailing labor during the war will ever carry a cargo in 
competition with the ships of other nations, and that 
unless sold for $40 or $50 a ton to the business men 
of other nations and operated under foreign flags with 
foreign crews, they will be tied up at their docks and 
rot to pieces where they float. 

Mr. Frank Vanderlip recently stated that : "The cost 
of working a ship under American laws and socialist 
wage provisions is four times as much as it is for 
working a Japanese ship and twice as much as for 
working a British ship." But he pretends to think that 
in spite of this handicap, American ingenuity and 
brains will in some way make it possible for the 
United States to operate our ships, which have cost 
from four to six times as much as Japanese and Eng- 
lish ships have cost, at a profit. He is indeed an opti- 
mist, for it is impossible to see why anyone with the 
genius necessary to accomplish this miraculous feat 
would waste his time in attempting to do it with 
American ships. However great the genius of such a 
man might be, he would go to Great Britain or Japan 
and exercise his genius there, where, with the lower 
costs of construction and the lower costs of operation, 
his genius would get from four to six times greater 
return than it would in attempting to do the impossible 
in this country under the American Flag. 

It is time for this country to appreciate the signifi- 
cance of the threats of Mr. Gompers, who is the spokes- 
man for Organized Labor. He has declared : "All 
labor will fight to the last gasp to maintain the wages 
and hours it has won through the war." 

While the war was in progress there were many who 



120 A DEFENCE OF WEALTH 

were willing to pretend that labor was patriotic, be- 
cause they feared that by recognizing and boldly stat- 
ing the true attitude of labor, they would incite it to 
increase its blackmailing demands. But does Or- 
ganized Labor think, now that the war is over and the 
tax-payers, the farmers, the clerks, the merchants and 
the rest of the country realize that labor has by its 
inordinate and outrageous demands caused the war to 
cost $25,000,000,000 more than it ought to have cost, 
that they are going to permit labor to keep on sucking 
blood from the rest of the country? How do they 
think that the $25,000,000,000 of wealth that was de- 
stroyed by the war is to be replaced? Is this destruc- 
tion of accumulated surplus to be replaced by encour- 
aging still shorter working hours, less production by 
everybody and costs from three to six times greater 
than they were before? 

The attention of the soldiers, particularly, is invited 
to the attitude of labor that stayed at home. While 
they were at the front exposing their bodies and risk- 
ing their lives for a dollar a day, Organized Union 
Labor at home was demanding and receiving from 
ten to forty dollars a day and slacking up its output 
to fifty per cent, of what it was before the war. And 
now the soldiers have come home to take up work, 
where everything they do is being taxed to pay the 
$25,000,000,000 of debt which was imposed upon the 
country in order to pay the extravagant demands of 
the labor that stayed at home and risked nothing. 

Labor, which during the past two years has been 
forcing by its extravagant and unjust demands the 
wanton destruction and consumption of $25,000,000,- 



DESTROYERS OF WEALTH 121 

000 of our National Wealth, is now anxiously inquir- 
ing why someone does not come forward with the 
money to finance the great peace-time projects that 
were being talked about before the war was ended. 
If labor had proved its ability to conserve its earnings 
it would find itself in possession of much of the $25,- 
000,000,000 of capital, or wealth, that it has wrung 
out of the rest of the country and ought to be in a 
position to finance its own needs for some time to 
come without asking the rest of the people to hazard 
any more of their accumulated surplus for the benefit 
of labor. But there is one particular thing in which 
labor always shows its discretion and that is its abso- 
lute refusal to put any confidence in or any financial 
backing behind labor. It never backs itself. 

One of the most trenchant criticisms of Organized 
Labor is one recently made by Sir Charles Allon : 
"Democracy has never been a good judge of leaders. 
Labor mistakes itself for democracy. By organiza- 
tion it controls much yet it has failed completely. 
Everybody but labor itself knows that it has failed. 
To organize a strike is not success : to have had to 
strike is a confession of failure. Think of the dif- 
ferences of the ideals and character of the man who 
went to the trenches and gave his ungrudging best ef- 
forts, his best brains, and his life, if need be, with 
that other man who spent his time in slothful folly 
in the factory under trade unionism. When union 
labor men take twice as long to build even their own 
houses they increase their own rents in proportion, and 
in this method of stretching out hours they have in- 
creased the cost of living to themselves before they in- 



122 A DEFENCE OF WEALTH 

creased their wages. The laboring men of the United 
States in not using their brains and their hands for 
their own good are losing $4,000,000 an hour, while by 
their slovenliness they are costing themselves nearly 
$9,000,000,000 per annum which they might produce 
more than they do, if they would. 

"Rich men are the mainspring of enterprise. Rich 
men are rich not because they have robbed the work- 
ingman but because they succeed in getting the work- 
ingman to do as much as they do in spite of the work- 
ingman's having robbed himself.'* 

In answer to Sir Charles, labor quotes Colonel 
Roosevelt, who declared that: "It is essential that we 
should wrest the control of government from the 
hands of rich men, who use it for unhealthy purposes." 
But he neglected to mention by name any of these 
mythical rich men who controlled the government, or 
who controlling it used it for unhealthy purposes. 

One of the greatest troubles of the present time is 
that these attacks on our men of brains and ability 
and on those who either have, or have not the ability to 
accumulate wealth, have made men of such endow- 
ments withdraw from public life and refuse public 
service. The men who under ordinary circumstances 
would be seeking out new enterprises, creating new 
industries and developing the undeveloped parts of the 
world are now doing nothing. 

Those who are attacking wealth pretend, now, that 
they are only attacking "swollen fortunes" but it will 
not be long until finding that these are difficult to find, 
they will attack and plunder not only the modest for- 
tunes of the so-called "well-to-do," but the trifling 



DESTROYERS OF WEALTH 123 

savings of the ordinary mechanic, storekeeper, school 
teacher and clerk, and with capital destroyed and 
driven from public use, the ignorant will then learn to 
what extent they had been dependent on the possessors 
of brains, ability, character and wealth. 

Among the things assured to our people by our 
Constitution was *'life, liberty and the pursuit of hap- 
piness." Certainly this means to assure comfort and 
ease in age and support out of property saved during 
a life of thrift. Do you want this right to be taken 
away from you? Or do you prefer to look forward 
to an old age supported by old-age pensions, which 
may or may not exist by the time you reach that period, 
for by that time the teachers of unthrift may find the 
pension fund dissipated and decide that social econ- 
omy requires the immediate execution of those who 
are no longer able to work and support themselves? 

Most of those who rail at wealth are men who care 
so little for their families and make so little provision 
for them that when their children are born their wives 
are compelled to go to the public hospitals, created and 
supported by the wealth which their husbands are at- 
tacking, and when they die the chances are ten to one 
that they are buried at the expense of some charity 
that has been created by the very wealth that they 
have been trying to destroy. 

What the ignorant mob cannot see or understand, 
is that the man of brains or of wealth must make 
twenty dollars for them in order to make one for him- 
self. In their effort to prevent him from making 
anything, they rob themselves of twenty times more 
than he could possibly make for himself. 




Chapter IX 

PROGRAMME OF LABOR 

It Proposes Nothing Less Than a Reversion to 
Savagery 

EVERAL years ago (1909), I listened to a 
course of lectures by Dr. Frank Fetter of 
Princeton University, on "The Develop- 
ment of Social Legislation." He showed 
hoAv the conscience of Britain was stirred by the ex- 
posure of the treatment of the idiots and insane in 
their poorhouses, and how legislation was passed to 
take care of those who were incompetent and unable 
to take care of themselves, either through lack or loss 
of their minds. With this beginning, he showed the 
growth and development of social legislation to take 
care of other incompetents. First, it extended the 
Government care to orphans, children without any 
natural guardians, who were unable to take care of 
themselves ; then to women, who were regarded as 
being so much controlled by their affections and their 
passions, or by the men to whom they were married, 
that they were unable to do what was best for them- 
selves; and finally, how it had extended from control- 
ling the conditions of labor for women to control- 
ling the conditions of labor for men, and had finally 
concerned itself not only with wages and the hours of 

124 



PROGRAMME OF LABOR 125 

labor but with everything that concerned the social 
condition under which labor was performed. 

At the conclusion of his course of lectures, the Pro- 
fessor invited me to make such comment or criticism 
as had occurred to me from hearing the lectures. 

I replied, that to my mind the most significant thing 
brought out by his whole course of lectures was the 
fact that union labor by demanding and securing the 
passage of the social legislation which he had de- 
scribed, had voluntarily classified itself along with the 
incompetents, and that it had by its demand for such 
legislation confessed itself to be incompetent to take 
care of itself, both as to social conditions and the 
negotiation in regard to wages. That if labor claimed 
that it was able to take care of itself, the legislation de- 
manded was absolutely indefensible and could not be 
justified, but if in connection with the request for such 
legislation the incompetent character of labor was 
acknowledged, the legislation could be justified, but 
that incompetent labor could not then be heard to dic- 
tate the terms of the legislation. That the legislation 
proposed for the protection of incompetents miist be 
prepared and approved not by the incompetents but by 
those who were best able to protect and take care of 
the incompetents. 

Doctor Fetter replied that he had never heard such 
a revolutionary idea advanced in connection with social 
legislation but that he was compelled to admit that it 
seemed sound and that he had not at the moment any 
answer to the proposition. That was years ago but he 
has not answered it yet. 

Socrates recognized the inability of the people to 



126 ^ DEFENCE OF WEALTH 

know what was good for themselves and drafted a 
prayer for the Athenians to address to their gods : 
"Give us what is good for us, whether we pray for it 
or not, and divert from us the evil for us even though 
we pray for it." Labor might well adopt this prayer. 

Labor, which is so industriously attacking wealth 
on the pretense that wealth represents something 
stolen from labor, little realizes how much it is de- 
pendent for what it enjoys, including the very oppor- 
tunity to work, to the existence of this wealth, which 
makes possible extraordinary spending in the gratifica- 
tion of extraordinary wants. Many of the things that 
labor is engaged in producing are truly luxuries, and 
cannot in any wise be classed as necessities, and would 
not be made at all if it were not for the accumulated 
surplus which enables the possessors of it to require 
extraordinarily fine work and to pay skilled workmen 
extraordinary wages in return for fine work. 

I wonder if the people of America realize that it 
is only through our great corporate combinations, our 
great trusts, if you please, that the cost of living has 
been so reduced in proportion to the wages of labor: 
the hours of labor have been shortened, production has 
been greatly increased and they have been enabled to 
take the time to read and misinform themselves and 
discuss and denounce the very institutions that have 
made possible their leisure in which to indulge this 
pastime. The President of Cornell University, in an 
address to the Socialist Club of that school said that: 
"Socialism claims to be a gospel of justice, but what 
is justice? Economic justice," he declared, "is to 
be realized not by the enactment of socialism but by 



PROGRAMME OF LABOR 127 

the abolition of special privileges." I ask the dis- 
tinguished gentleman to show me the legislation, or in 
fact, any legislation that has granted special privilege 
except to labor? He further says that: "The improve- 
ment of the condition of the toiling masses is the 
supreme problem of our age." But has it not been 
sho^n again and again that people resent being clothed 
when they prefer going naked? They resent being 
washed when they prefer going unwashed? When 
will these loose thinkers and still looser talkers realize 
that the only sort of improvement that truly improves 
is that which individuals do to themselves and for 
themselves? The only improvement that is ever per- 
manent is that which grows out of a desire in the 
minds and hearts of the people themselves. It is use- 
less to talk of improving toiling masses of people. 
They must improve themselves. It is useless to wash 
a hog for he will at once return to his wallow. 

This University President also said that: "Poverty 
exists because nature is niggardly and because man, if 
not lazy and thriftless like the savage, is ignorant of 
the mystery of nature and unsuccessful in coping with 
her." A statement scientifically true and one which 
absolves every person in the world from any respon- 
sibility for the poverty of others. If any man labors 
where nature is niggardly it is because he is too stupid 
or too lazy to move himself to some place where na- 
ture is more beneficent. If he is ignorant of the mys- 
teries of nature he can by study solve them as have 
others, or if too lazy to do that, he can share with 
someone who has solved these mysteries, his own in- 
creased production in consideration of the mysteries 



128 A DEFENCE OF WEALTH 



being explained to him, which, by the way, is what he 
does. 

In early days the knowledge of how to do things in 
different lines was regarded as a craft or trade secret 
and would not be imparted by those skilled in making 
any particular line of articles, except to others who 
apprenticed themselves to them for periods of years, 
nominally for the purpose of learning the craft or 
trade secrets, but really paying by several years of 
service for securing possession of the craft or trade 
device or method. And if unskilled, man may by in- 
dustry become more skillful, or again by making it 
worth the while of some skillful individual secure 
from him instructions on how to become more skillful. 

The people, who attack wealth, do not realize what 
they are doing, and it is common even among those 
who should know better to express fear over the 
growth of wealth. Now you must realize that wealth 
is nothing more or less, and never can be anything 
more or less than the surplus of production over con- 
sumption. The increase of wealth means nothing but 
that as a people, we are increasing the surplus of what 
we produce above what we consume, and so piling up 
that surplus to be used in all the possible ways in 
which such a surplus can be used. 

We have not yet begun to use that surplus as we 
should, because we have had so many uses for it here 
in our own country in developing the still undeveloped 
portions of our own national territory. But when we 
realize that our own country is the best developed 
country in the world, that practically half of all the 
railroad mileage on the earth has been built in our 



PROGRAMME OF LABOR 129 

own country, that more than two-thirds of all the tele- 
graph and telephone lines in the world have been 
built and are in our own country, that eighty per cent, 
of all the automobiles built and in use in the world are 
in our own country, and that the rest of the world is 
waiting for similar development, we must see that far 
from discouraging the creation and accumulation of 
surplus, or wealth, that we must increase it, and turn 
our surplus, our capital, to the developing of China as 
our own country has been developed ; to the develop- 
ment of Australia ; to the development of Africa and 
South America. 

To attack wealth is to attack thrift. To appropri- 
ate the surpluses thus created means to discourage 
work, and there is no possible stopping between the 
two attitudes toward civilization. If you preach thrift 
you must protect created surpluses. If you attack 
created surpluses you kill thrift and turn labor back 
to the point where there is no object in producing 
anything more than the individual can consume. 

The movement for shorter hours is primarily a 
movement directed against surplus production. It is 
intended to reduce any possible production to the 
point where a surplus will be impossible. It is, there- 
fore, directed primarily against the possible creation 
of any wealth, and is an effort on the part of unthink- 
ing labor to reduce the whole world to a condition of 
living from hand to mouth. 

The programme proposed by labor needs but to be 
studied to demonstrate that it proposes nothing less 
than a reversion to savagery. 

Let us state labor's programme in its own terms. 



130 A DEFENCE OF WEALTH 

and let us see where labor's programme leads us. 

Labor has asked, first, for shorter hours because 
it claimed that it was producing more than could be 
consumed, and was therefore piling up a surplus 
which being in the control of others gave those, who 
controlled it an undue advantage over those who 
produced it. 

Second, labor asked for higher wages or a larger 
share of what it produced, claiming that since it was 
the producer of all this product, that which was con- 
sumed as well as the surplus that remained above 
ordinary consumption, it was entitled to a larger share 
of the product so that there would be a smaller sur- 
plus left in the hands of those who controlled that 
surplus. 

Third, having secured shorter hours so that the 
total product of their labor would be less and having 
secured a larger proportion of what they produced 
as its share, labor next insisted on cutting down the 
product per man to what the poorest workman in the 
lot could produce. 

But while insisting on curtailing the product, labor 
was unwilling to accept any less amount of the pro- 
duct for itself, so that the sole result of curtailing the 
product was not to reduce the amount of the product 
that labor received but was to reduce the surplus left 
over for those who had gathered the material for labor 
to work on and who protected the surplus for distri- 
bution during times of temporary shortage. 

This process has been continued until surpluses 
have been consumed in some lines, as in coal, in 
which line labor has succeeded in decreasing its hours 



PROGRAMME OF LABOR 131 

and increasing its proportion of the product until the 
surplus has been entirely consumed. And labor now 
attempts to take advantage of the necessities of the 
other branches of industry by refusing even to pro- 
duce coal unless the others will permit labor engaged 
in coal mining to make two or three times as much as 
labor in other lines of industry. 

It is easy to see where this is going to lead. The 
producer of wheat will refuse to give the producer of 
coal, wheat that it takes him two days to produce for 
coal that it takes the miner but one day to produce. 
The spinner of wool is not going to give the product 
of two days of his labor to the coal miner for the 
product of one day of his labor. Before they will do 
that, they will quit producing wheat and weaving 
cloth, and go to producing coal themselves. Now when 
the coal miner finds them doing the work that he re- 
fused to do, he will be compelled to attempt to prevent 
them — that would mean a fight. 

When the miner found the clothing man refusing 
to furnish him clothes, he would attempt to raid the 
clothing store and help himself, and when he found 
the groceryman refusing to sell him food, he would 
raid the grocery store or the bakery shop, with the 
result that the bakers and the grocery men and the 
clothing men would organize themselves together to 
protect themselves against the raids of the miners, 
and they would either wipe the miners oflF the earth 
or reduce them to a condition of subserviency, where 
for a time at least (that is until they could recognize 
the fact that they were no better than other men) they 
would be compelled by force to remain in a position 



132 A DEFENCE OF WEALTH 

of slavery to the others. (See how quickly the prob- 
lem and the conflict reduces itself to the identical level 
of the primitive men.) 

The movement for the curtailment of production 
is for the purpose of letting consumption continue 
until it has wiped out all surpluses. Each trade hoping 
in this way to force all others to become dependent 
upon it. 

The wiping out of all surpluses means that the whole 
race must go back to the stage where it lives a pre- 
carious existence, where the race has no time to give 
thought to anything else but finding each day that with 
which it may feed itself. If, for any day, it should 
fail, failure would mean hunger, and hunger would 
mean raids and raids would mean reprisals. 

Being compelled to devote all of his time to the 
search for food and shelter, no human being would 
have time for thought or for study, or for invention. 
With no time for study, there would be no time for 
education. With no time for thought above the physi- 
cal fact of living and keeping alive, there will be neither 
religions nor morals. There were neither religions 
nor morals before wealth creation began and there 
can be none when wealth has vanished, for when self- 
preservation becomes the sole object of existence, the 
race is reduced to the stage of animal existence and 
becomes like animals, unmoral. 

It is time for the educated idiots that run our uni- 
versities and the sympathetic simpletons that occupy 
the places of prominence in the church to realize that 
by their sympathy with and their support of labor 
unionism and socialism, they are encouraging a course 



PROGRAMME OF LABOR 133 

of human action and of human conduct that will ulti- 
mately destroy them, their professions and the idols 
which they worship. 

The Board of Bishops of the Methodist Episcopal 
Church has recently sent a pastoral letter to the 
eighteen thousand ministers of its denomination, in 
which it declares : "We favor an equitable wage for 
laborers, which shall have the right-of-way over rent, 
interests and profits." 

They do not attempt to say what an equitable wage 
shall be, and ignore the fact that no wage can be 
equitable which is uneconomic. The first necessity 
for wage earners to get any wages at all is that the 
industry must live. When they propose that the prin- 
cipal or plant shall be plundered to pay wages that are 
not earned and that cannot be paid out of profits, they 
are proposing nothing less than what the Bolsheviki in 
Russia are practicing and the results will be the same. 

Next they say: "We favor collective bargaining." 
There is no law in the world prohibiting collective 
bargaining, and no one objects to it. There is nothing 
to prevent any man, who is not able to drive a good 
bargain for himself from hiring another to represent 
him, nor is there anything to prevent a hundred or a 
thousand incompetents from appointing guardians over 
themselves to represent them and to make a collective 
bargain for their services. The thing that is objected 
to and which is uneconomic and immoral, is the 
attempt to compel the efficient, capable individual to 
abide by a bargain made for a thousand incompetents 
by their guardians and deny to the efficient, capable 
man, the right to bargain for himself and if possible to 



134 A DEFENCE OF WEALTH 

make a better bargain for himself than the collective 
bargainers are able to make for themselves. 

The Bishops also say: "We favor advance to the 
v/orkers through profit-sharing and through positions 
on boards of directorship." This is chiefly words. 
For everyone with practical experience knows that the 
employers of labor are constantly looking among their 
workers for men of ability and ambition who are 
able to climb higher. If the Bishops mean no more 
than this there is little excuse for what they have 
said, but if they mean anything else, it must mean 
that a share of profits shall be given to those without 
ambition or ability or that places on Boards of 
Directorship shall be granted not to those who seek 
efficiency and economic operation, but to those who 
will seek to prevent the company from being success- 
ful and getting the work out of the men that they 
ought to gQt. Such a procedure is like voluntarily ex- 
posing one's self to contagion of a disease invariably 
fatal. The idea has been tried in Russia and failed. 

Lenine, in addressing his followers, candidly con- 
fessed that: "If socialism is to prevail it must show 
a production and efficiency superior to capitalism, but 
that efficiency is possible only when a 'boss' is instantly 
obeyed. However free a citizen may be outside of 
the factory, once within the factory and under the 
direction of a *boss,' whom he himself has helped to 
select he must serve that *boss' with military quickness 
and exactness. If we cannot get production otherwise 
it may be necessary to give the 'boss' the right to inflict 
the death penalty on the worker who refused to obey 
orders as a court-martial does on a mutinous soldier." 



PROGRAMME OF LABOR 135 

This is the logical end towards which labor's pro- 
gramme leads. 

Eighty years ago, in the United States Senate, 
Daniel Webster said : "There are persons who con- 
stantly clamor, they complain of speculation and of 
the pernicious influence of accumulated wealth. They 
cry out loudly against all banks and corporations, and 
all means by which small capitals become united in 
order to produce important and fundamental results. 
They carry out mad hostility against all established 
institutions. In a country of unbounded liberty they 
clamor against oppression. In a country of perfect 
equality they move heaven and earth against privilege 
and monopoly. In a country where property is more 
evenly divided than anywhere else, they rend the air 
shouting agrarian doctrines. In a country where the 
wages of labor are high beyond parallel, they would 
teach the laborer that he is only an oppressed slave. 
They would shock the foundations of industry and 
dry up all the streams." 

In this country of ours we have developed the 
greatest power of production in the world. A power 
of production so great that not only can we not begin 
to consume what we produce, but it has been estimated 
that we can produce in this country eight times as 
much as we can consume. Manifestly, the prosperity 
of this country will not be maintained by curtailing 
our production, but rather in seeking to sell abroad 
our surplus. If we do not sell abroad or invest 
abroad a large part of our surplus production or 
wealth we must reduce our production at home. 
Reduced production means less work, less work means 



136 A DEPENCM OF WBALTM 

less wages, less business of all kinds and gradual stag- 
nation and hardship. Look at the damage that has 
been done to the people of Russia by their senseless de- 
struction of their own power of production. Yet this 
is the direct result of that kind of "Public Ownership" 
which is urged by labor as a cure for our ills here. 

The kind of public ownership that we want is not 
the irresponsible, wasteful and destructive ownership 
advocated by labor and socialistic propagandists. If 
the public want real public ownership they have only 
to interest themselves in the businesses engaged in 
serving them. The only proper kind of public owner- 
ship is ownership by the citizens of all classes of the 
stocks of our railroads, our public utility corporations 
and all those other great companies, engaged in feed- 
ing or satisfying the imperative needs of the people. 

If the discontented laboring man would work a 
couple of extra hours a day for a year and invest the 
surplus so created in stock of some one of the busi- 
nesses engaged in public service, and would thereafter 
devote a little intelligent study to the conditions under 
which, that or other businesses must be conducted, we 
would have real public ownership of the kind that 
would practically put an end to the discussion of the 
senseless kind promoted by the professional critics 
of wealth. 

When one appreciates the sanity of this proposition, 
it seems reasonable to propose that no citizen should 
be permitted to vote on a question involving a public 
service proposition unless he could show that he had 
created some surplus by his work and invested that 
surplus in the public service corporation under discus- 



PROGRAMME OF LABOR 137 

sion. In other words, if he is not a stockholder in the 
proposition he should not have a vote. The irrespon- 
sible will always be numerically in the majority, but 
granting the interest of the mass of people in the 
direction of government, and granting that their in- 
terest in successful government is greater than all 
other interests, it by no means follows that the mass 
of their interest is entitled to direct the state, or that 
civilization will be better protected by permitting to 
their mass of mediocre minds the direction of the 
society. 

A pilot who knows the rocks is a far safer navigator 
for the ship of state than any crew, however numerous 
who know nothing of navigation and who have no 
acquaintance with the shore. 




Chapter X 

WEALTH OR NO WEALTH? 

What Did Poverty Ever Produce? 

RIMITIVE man produced nothing. It was 
for a long time possible for him to find 
in nature by a little search all that he 
could consume. But as population in- 
creased in the favored spots, effort became necessary 
in order to assist nature to produce enough to supply 
the wants of the increasing population. 

The beginning of wealth was when the foresight 
of one man caused him to save what had formerly 
been thrown away. From that day till this, the crea- 
tion and conservation of wealth has always been a 
triumph of judgment and of will over instinct and 
desire. To continue at work after hunger is satisfied 
is an intellectual feat. A combination of that judg- 
ment, which assures us that the continuing of work 
under present favorable conditions will create and 
pile up a surplus, that will enable us to take rest at a 
time in the future when rest will be more needed, and 
the exercise of will power to keep at work, which our 
judgment tells us is expedient. You know that no 
man can consume all that he can produce. 

The truth is that every man is born to be rich, and 
that those of us who are not, are not, because of some 

138 



WEALTH OR NO WEALTHt 139 

weakness of our own which we are unable or unwill- 
ing to curb or to overcome. 

Did you ever as a boy, get up early and do your 
chores before breakfast, so that you could have the 
rest of the day to see the circus or to go to the fair? 

Your efforts to do your alloted task in a shorter 
time than usual in order that you might have hours 
or days that you could not otherwise ha\e for pas- 
time or study, are based on exactly the same principle 
as that involved in all surplus production or wealth 
accumulation. It is the effort of individuals to work 
a litle harder or a little longer and to produce more 
than they need for the consumption of a day, a month 
or a year, in order that they may enjoy a later period 
for recreation or study, or work of a kind that they 
prefer, without being under the necessity of working 
every day for that day's support. 

Remember wealth is not mere production ! A vast 
production that is totally consumed creates no wealth. 
You may produce ten times as much as another man 
produces, but if you consume all that you produce 
while he saves even a small surplus of what he pro- 
duces, he is richer than you. Wealth is only what is 
left over after consumption. It is the surplus stored 
up, like the fat on the bear that enables it to live 
through the winter without other nourishment. 

It is time for our political philosophers to recognize 
and to teach that it is impossible for wealth to be 
created dishonestly. The existence of capital is proof 
of the fact that some time, some where, some how, 
some one worked more than he needed to work, 
created more than he could consume and with foresight 



140 A DEFENCE OF WEALTH 

saved it. There never was and never can be any 
v^^ealth or any capital created except by work which is 
productive and creative. The possession of wealth, or 
capital, in the hands of any other than those who 
created it is proof of the incapacity of the original 
creators to properly protect it, or care for it, or use 
it, and is proof that it has in compliance with that 
higher and fundamental law of use, passed into the 
hands of those, who can or at least have the courage 
to make more or better use of it. 

Labor, itself, has always obeyed this law of use. 
In primitive times the roving and unattached individ- 
uals sought out and attached themselves to those 
chiefs, leaders, or "bosses," that were able to make 
use of them and so make better provision for them 
than they could make for themselves. Leadership, 
therefore, fell to the man who was the best fighter, 
the best hunter, the best herdsman, the best agricul- 
turalist, and in these days, to the man who is the best 
industrialist. The incompetents, even while protest- 
ing against their leaders, have always sought to work 
for and put themselves under the direction of the 
abler and more resourceful individuals of the race. 

In primitive times, the accumulation of surpluses, or 
of wealth, was more or less accidental and haphazard. 
It was always local. For it was impossible with the 
then means of transportation and communication, to 
use the surplus, or wealth, that existed in any one 
part of the world for the relief or development of any 
other part of the world. Yet every evidence that we 
now have of the civilization that existed in the past 
is due to the use of the wealth that then existed, in 



WEALTH OR NO WEALTH? 141 

expressing its thoughts, its ideals and its aspirations, 
in the monuments, the images, the rock cut caves, the 
temples, the walls, the canals, the pyramids, and other 
monuments of the past. 

Before you commit yourself to a civilization based 
upon the absence of wealth, you should take stock of 
the things that you most need, that you most use, that 
you most enjoy, and then consider that everything 
that we regard as indispensable in our lives ; everything 
that is expressive of what we call civilization today, 
would not have been devised and never could have 
been made or done had it not been for the existence 
of great surpluses of great wealth. 

And further that they cannot exist or continue to 
be made for your use and enjoyment except by the 
creation of still greater surpluses, or wealth. 

Only by the accumulation of surpluses in the form 
which we call wealth is it possible to build those great 
works and monuments that are the pride of our civi- 
lization. Only because of their wealth was it possible 
for the Medici to keep Michelangelo working for 
years at those wonderful tombs and monuments that 
are the chief art treasures of Florence today. Only 
the wealth of a Medici pope made possible the work 
of Michelangelo at St. Peter's and the Chapels of 
the Vatican. The inspiration that has come to every 
one, who has ever been permitted to look upon these 
artistic masterpieces, has only been possible because 
of the accumulated wealth in the hands of those who 
were in this way able to support the great master 
while he achieved these wonders. 

Did anyone ever hear of a great cathedral being 



142 A DEFENCE OF WEALTH 

built or a great artistic masterpiece being created 
through the penny subscriptions of the poor, or the 
dollar per capita contributions of the improvident? 

What would the genius of a James Watt have been 
worth without capital? But by the use of the then 
existing wealth, he turned coal and water into steam 
and revolutionized the use of power, relieving for all 
time the race of man from the burden of winding 
windlasses or working pumps, and practically elimi- 
nated men and animals from the work of transporta- 
tion. 

It is doubtful whether our American Colonies could 
have won their independence had it not been for the 
wealth accumulated by George Washington and 
Robert Morris. 

We would today be without railroads, steamships, 
telegraphs, telephones, electric lights, pure water, 
steamheat, phonographs, moving pictures, vacuum 
cleaners and all those other things that make life to- 
day endurable, had it not been for wealth, created and 
saved by the judgment and self-denying will of those 
who placed it in the hands of scientific men, who used 
these accumulations in the creation and development 
of these wonderful public servants. A development 
that they have continued until all these things have 
been made so cheap that their use is practically uni- 
versal among the peoples pretending to civilization. 
We, in this country, cannot even imagine what the 
world was like before they came into use. 

Such relief as was given to stricken people in the 
case of the Galveston flood, or of the San Francisco 
fire, or of the Italian earthquake, was impossible in an- 



WEALTH OR NO WEALTH? 143 

cient times and would remain utterly impossible even 
in this day without the existence of accumulated sur- 
pluses or wealth, dispensable by scientific methods 
under modern conditions. 

Without accumulated wealth, such great works as 
the construction of New York City's subways, would 
have been impossible, and all our people who now 
use them would either be cut ofif entirely from their 
present employment, or be compelled to take hours 
to reach their work. 

When I think of all these things, I wonder that a 
Socialist, or a Bolshevik, will ride on a railroad, or 
use any of the multitude of modern devices invented 
by the intellectuals, whom they denounce, and built 
or constructed by the wealth, which it is their declared 
purpose to destroy ! Conscientious practice of the 
principles that he professes would require the Social- 
ist, the Bolshevik, and the I. W. W. to go down to the 
river to get his drinks, and to walk wherever he goes, 
unless he is able to get some fellow to carry him. 

Without accumulated wealth the recent triumphs 
of mankind over nature would have been impossible. 
The Suez Canal and the Panama Canal would still re- 
main dreams. 

Without accumulated wealth the hospitals of the 
world would remain unbuilt, and such extraordinary 
benefactions as the Rockefeller Medical Research, the 
Rockefeller Medical Work in China, and the Educa- 
tional Foundation, would not only be impossible but 
would be unthought of. But for the wealth of Amer- 
ica and Great Britain the world would now be under 
the domination of the exponents of force and plunder. 



144 A DEFENCE OF WEALTH 

Destroy wealth and you kill education. For only 
by the creation of surpluses, is it possible for any in- 
dividual to take time off from daily work to study. 
Abolish wealth and you abolish libraries. You abolish 
even the use or need of libraries. For when everyone 
is living from hand to mouth, as the labor programme 
seeks to compel, the pursuit of food will leave no one 
time for reading or contemplation. Destroy wealth 
and you make impossible everything in the way of art. 
The success of the propaganda against wealth would 
further necessitate the destruction of all art now ex- 
isting, for fear that some seeing the remains of the 
art produced in an age of wealth might argue that it 
would be well for the race to return to the conditions 
of a civilization that made the production of such art 
possible. Destroy wealth and you put an end to scien- 
tific investigation. Who can study while hunger calls? 
Everything you have or need or use or enjoy is the 
product of wealth. Wealth ! created not by ignorance 
and labor but by brains. 



WHAT DID IGNORANCE AND POVERTY 
EVER PRODUCE? 

The man, who never produces any surplus but who 
works each day only enough to provide that day's con- 
sumption, is the man who is truly poor. Poor, be- 
cause, he never accumulates the surplus that enables 
him to take a day off for recreation or study. Poor, 
because, the daily grind of satisfying the demands of 
his stomach leaves him unable to do anything for the 



WEALTH OR NO WEALTH? 145 

cultivation of his mind. When you realize that this 
is the essential quality of poverty, of poverty the result 
of ignorance and the creator of ignorance, and as 
such the creator or cause of all those vices and diseases 
that thrive because of ignorance; when you realize 
this then you see the moral heinousness and economic 
folly of a social philosophy that pretending to wish 
the betterment of mankind, in fact preaches and prac- 
tices a curtailment of production that forever fastens 
poverty and ignorance on those who practice its 
principles. 

Labor complains of the high cost of living, and 
blames this high cost on the existence of wealth. It 
professes to believe that only by the destruction of 
wealth can living be made cheaper. The truth is that 
rising prices which produce the high cost of living are 
the result of a consumption greater than production. 
The only way to reduce the price is to increase the 
production, yet labor insists on shorter hours, the cur- 
tailment of production, and fights every effort to in- 
crease production, which alone can reduce the cost 
of living. And further than this, labor strives to de- 
stroy all surplus production, or wealth, which alone 
can keep prices down and the cost of living low. 

Remember that wealth is nothing but surplus pro- 
duction created and piled up in excess of consump- 
tion. Wealth is over-production, and over-production 
always tends to reduce prices and lower the cost of 
living. Over-production, or the production of a sur- 
plus in excess of consumption is the creation of wealth. 
It is, therefore, only by wealth production that we can 
reduce prices and lower the cost of living. 



146 A DEFENCE OF WEALTH 

On the other hand, wealth destruction, the con- 
sumption of surpluses and the curtailment of produc- 
tion, means rising prices and the raising of the cost 
of living to a famine level. 

It is time for everyone to appreciate that the more 
of surplus, or wealth, that there is created, the more 
there is for distribution, and the more there is for 
each and every man. 

It is perfectly plain that we can better our condition 
only by accelerating the production of wealth, and that 
can only be done by removing all obstacles to wealth 
creation, by the universal use of every labor-saving 
device that the intellectual Caesars of our race have 
been able to invent, and of offering even greater in- 
ducements to the Caesars of genius living, or that may 
come hereafter, to devise even more wonderful instru- 
ments for wealth creation than any that have been 
conceived or devised in the past. 

The issue is plain. A race afflicted with hunger and 
cold gives no thought to the immortality of the soul. 
It was only after the abolition of hunger and cold that 
the race began to develop intellectually, morally and 
spiritually. And, if the era of hunger and cold shall 
ever return, it will drive from the thoughts of men 
everything that we now know of spirit, of morals, or 
of intellect. 

Wealth or no wealth? Comfort or no comfort? 
Education or no education? Progress or no progress? 
Art or no art? Civilization or no civilization? 

It is useless to complain of the endowments that 
nature has given or has failed to give to any of us. 
We may not have been given the brains or the ability 



WEALTH OR NO WEALTH? 147 

or the talent ever to be leaders, but we may at least 
conquer our primitive instincts of wolfishness and 
thievery enough to enable us to accept the leadership 
and direction of those abler than ourselves and share 
in their prosperity. 

If you v^ant to prosper get in line with those who 
prosper, that is, with those who produce. 

Wealth seeks the hands of those that give it its 
greatest use and activity, and labor of its own accord 
seeks employment where it can be directed by the best 
brains, because there it gets the better job, the best 
wages and lives the best. Who ever prospered by 
working with a business that failed? 

I have called attention to the fact that wealth is 
produced not by labor but by brains. The image or 
mark of the Caesars of Invention, of Transportation, 
of Business, is stamped upon every device of the civi- 
lization we enjoy today. Look at the things all about 
you by the use of which you live; whose image does 
it bear? Watt's, or Field's, or Edison's, or Rocke- 
feller's, or Carnegie's, or Armour's, or a hundred 
other names that I might mention. 

Do you complain that these men have enabled you 
to produce more and to live better than your fathers, 
or your grandfathers, ever dreamed of producing or 
living? Will you accept the leadership of those, who 
advise you to throw all this away and go back to living 
with only what you can make and do for yourself, or 
will you help preserve what you now enjoy, and if you 
use and enjoy the inventions and devices of other men, 
if you accept the service of their superior brains, if you 
seek their direction and leadership, because by so 



148 A DEFENCE OF WEALTH 

doing you do better for yourself, can you doubt the 
justice of paying tribute to them? 

There was in days of old a people who enjoyed 
peace at the hands of Caesar and in their peace they 
prospered. But they complained that out of their 
prosperity they had to pay tribute for the peace and 
protection that they enjoyed. They sent to a wise man, 
who they knew neither cared for nor feared any man, 
not even Caesar, and asked him what they should do. 
He asked them to look at the symbol of the peace and 
prosperity that they accepted and enjoyed and behold, 
it bore the mark of Caesar and he said : "Pay Caesar 
for that which you owe to Caesar." It was the way 
of Truth and Justice then and it remains so forever! 



INDEX 



Abbot on gold mining, 62. 

Ability, diversity of, 23. 

Accumulated wealth, use 
of, 79. 

Adamson Law, 116. 

Allon, Sir Charles, quoted, 
121. 

American Sugar Company, 
99. 

America's intensive devel- 
opment, 128. 

Apprentice system, 128. 

Archimedes, 23. 

Aristotle, 23. 

Arkansas, blackmailing 

suits by, 99. 

Armour, Philip D., 71. 

Art and wealth, 144. 

Art treasures, 141. 

Attacks upon wealth, 112; 
upon thrift, 129. 

Aubert, Georges , quoted, 89. 

Axes invented, 5. 

B 

Barter, primitive, 7. 

Bishops, Methodist on 

wages, 133; labor as 

directors, 134. 
Bolshevism, Ross report, 

115; in America, 116; 

practice upheld, 133. 
Born to be rich, 138. 
Blackmailing by States, 

98; by labor, 118; on 

cost of ships, 118; labor 

cost, 120. 



Blind, law against seeing, 
100. 

Brains, in production, 18; 
subsidized, 24; value of, 
29; in wealth creation, 
32; demand for, 32; 
withdraw from life, 122. 

Bryan, on executive talent. 
65; fair pay, 70. 



Caesar, 23. 

Caesars, intellectual, 146; 
of invention, 147; mark 
of, 147. 

Camouflage, of civilization. 
112. 

Canals, cost of, 27. 

Capital, nothing cheaper 
than, 33] without brains, 
33; with brains, 41; at- 
tempts to dictate to, 88. 

Carnegie, sale of business, 
41; income, how pre- 
served, 42; steel com- 
pany, selling cost, 42; 
services to country, 43; 
his fortune, 43; gospel 
of wealth, 57; on part- 
ners, 66; Ferrero on, 96. 

Cathedrals, cost of, 28; 
how built, 141. 

Clergy quoted, 75. 

Caves preferred, 8. 

Chinese scholars, 26. 

Church sympathy with 
Socialism, 132. 



/^D EX 



Civilization, progress of, 
13; saved through wealth, 
50; without wealth, 141. 

Clamor, of people, 101. 

Coal, price in China, 17; 
preposterous cost, Z6. 

Coleridge on inheritance, 
60. 

Competition, conditions of, 
58; cannot eliminate, 58; 
insures survival of work- 
ers, 58; economically 
justified, 101, 

Confucius, 23. 

Constitution, property un- 
der, 91; protects con- 
tracts, 93; equal treat- 
ment guaranteed, 94; 
justified by growth un- 
der it, 95; attacks due 
to European jealousy, 
95. 

Consumption limited, 36. 

Contagion, not understood, 
25. 

Control, by government, 
90. 

Corporations, a beneficent 
device, 86; first ecclesi- 
astical, 93. 

Cornell, president of, quot- 
ed, 34; president on So- 
cialism, 126; on poverty, 
127. 

Cost of living, how raised, 
56; reduced by trusts, 
126; reduced by produc- 
tion, 145. 

Crime, to have sense, 34; 
of useless toil, 35. 

Curtailment of production, 
130, 131, 135. 



Deaf, law against hearing, 

100. 
Decision of intelligent men, 

Z7. 
Delaware, Lackawanna & 

Western, 100. 

Demagogues practice upon 
people, 51; graft by, 94; 
basis of attacks, 98. 

Destruction of wealth, 112. 

Deterioration of wealth, 59. 

Devices appropriated, 18; 

property rights in, 18. 
Dishonesty, growth of, 64. 

Dodd, S. C. T., 39. 

Doers, attitude of, 38. 

£ 

Economic thought, English 
school of, 21, 22; French 
school, 21; Italian school, 
21; German school, 21. 

Economic loss, attacks on 
trusts, 67. 

Edison, value to mankind, 

71. 
Education, confined to 

small per cent., 37; and 

wealth, 144. 
Efficiency condemned, 55. 

Electric lights, invented, 

31. 
Elevators, invented, 31. 
Elliott on salaries, 64. 

Endowment not equal, 38. 

Enemies impose on people, 

55. 
Epidemics, cost of, 25. 

Evolution, recognized, 58. 



IN D EX 



Existence, how bettered, 
16. 



Fakirs of India, 34. 

Famine, prices, 146. 

Farm values, wheat prices, 
102. 

Ferrero on America, 96. 

Fetter, Frank, quoted, 124, 
125. 

Field, services of, 44. 

Food, results of better, 11, 
12. 

Fool and his money, 104. 

Forst, Hans, on Russia, 
114. 

Fortunes, made by brains, 
2>2); out of garbage, 38. 



Galileo, 23. 

Galveston flood, 142. 

Game, oldest, 49. 

Garrettson, threats of rev- 
olution, 108. 

Georgia Farm, story of, 48. 

Gompers, threats of, 119. 

Grains, discovered, 4. 

Great Wall, cost of, 27. 

H 

Harriman, genius for man- 
agement, 53; fortune a 
small commission, 53. 

Harvesting machinery, 56. 

Higher wages, effect of, 
130. 



Hill, James J., 53; on law- 
making, 74. 

Horse stealing, and ideas, 
19. 

Hunting, preferred, 9; re- 
wards, 9, 11; lucky, 12. 



Ideas, theft of, 19; value 
of, 20; property in, 20. 

Ignorant rich, 79. 

Income, how increased, 18. 

Incompetents, labor classi- 
fied, 125; bargain by 
guardians, 133. 

Independence won by 
wealth, 142. 

"Independent" on proper- 
ty, 104. 

Inequalities, human, 12. 

Inheritance, laws of, 60; 
protected, 92; per cent, 
leaving estates, 77. 

Intellectuals, attitude to- 
ward labor and wealth, 
26; extermination in 
Russia, 43. 

Invention, property rights 
in, 29. 

Iron beams, invented, 30. 

Italian earthquake, 142. 



"Journal's" defense of 
wealth, 80. 

K 

Kentucky, bridge law, 99; 
blackmailing suits, 99. 

Kingsley on Sherman law, 
87. 



IN D EX 



Labor, directed by brains, 
21; non-productive, 22; 
without brains, 32; the 
reward of, 46; ignorance 
of, 46; cost of housing, 
46; cost of clothing, 47; 
cost of food, 47; cost of 
fuel, 48; protests com- 
petition, 58; never haz- 
ards anything, 63, 104; 
effect of higher wages, 
76; like the degenerate, 
112; never backs itself, 
121; robs itself, 122; 
programme of, 124. 

Labor vs. Labor, 130. 

Lands, how valued, 16, 29. 

Laws, circumvention of, 
38; flouted by govern- 
ment, 51; repeal of un- 
economic, 56; interfere 
with nature, 97; for pur- 
pose of plunder, 99. 

Law of use, for wealth, 
140; labor obeys, 140, 
147. 

Lenine, follower of Marx, 
114; on production, 134. 

Lightweights, law against 
heavyweights, 99. 

Liquidation bureaus in 
Russia, 114. 

Loom, first invented, 29. 

Lycurgus, 23. 

M 

Marconi, 44. 

"Marine News" on labor, 
117. 

Marx, theories of, 114. 

Michelangelo, 141. 



Middleman, their cost to 
the people, 85; their 
clamor, 85. 

Millionaires, proof of im- 
providence, 62. 

Mining, hazards of, 62. 

Minds, quality of, 24. 

Missouri, blackmailing 
suits, 98. 

Monuments of wealth, 103. 

Morals, double - standards 
of, 51; abolished, 132; 
destroyed, 146. 

Morgan, purchase from 
Carnegie, 41 ; hired by 
people, 80; purchase of 
books, 80; hospital, 81; 
Ferrero on, 96. 

Morris, Robert, 142. 

Municipal ownership, folly 
of, 88. 

N 

Nails, 30. 

Nail mill, 41. 

N. Y. City subways, 143. 

Non-doers, barking of, 39. 



Old-age pensions, 123. 

Over-production, lowers 
price, 145. 

P 

Packing houses, profits of, 
51, 84; should extend 
services, 85. 

Panama canal, 143. 

Phillips quoted, 46. 

Piez on labor, 117. 



IND EX 



Pilot, selection of, 137. 

Pin making, invented, 30. 

Plato, 23. 

Plunder, of well-to-do, 122. 

Poor, gifts no benefit, 103. 

Possessors of wealth, 50. 

Poverty, essential quality, 
144. 

Power press invented, 30. 

Prices reduced by big busi- 
ness, 55; raised through 
attacks, 85. 

Primitive instincts. 111, 
112, 147. 

Primitive conflict repeated, 
132. 

Primitive wealth haphaz- 
ard, 140. 

Printing invented, 25. 

Privilege, of serving, 64; to 
work, 97. 

Problem of the ages. 111. 

Production increased by 
brains, 29; how doubled, 
32; share in increase, 
Z6', unlimited, Z6', cre- 
ates surplus, 59; greatest 
in America, 136. 

Profiteering of small deal- 
ers, 85. 

Profits, effects of limiting, 
88. 

Property, conception of, 
19; in Europe, 91; in the 
colonies, 91; effects of 
confiscation, 92, 93. 

Prosperity of America, 91. 
Protective tariff, operation, 
97. 



Public ownership, popular, 
136; sane, 136. 

Pygmies, law against size, 
100. 

Pyramids, cost of, 27. 



R 



Raids, counter, 10; repri- 
sals, 132; of miners, 132. 

Railroads, invented, 29; 
demands of employees, 
51; possible through 
wealth, 86; result of at- 
tacks, 86; regulation un- 
economic, 101; plunder 
by labor, 105, 109; plun- 
der squandered, 106. 

Railroad enterprise, killed, 
108. 

Railroad unions, threat to 
destroy, 108. 

Rockefeller, distributes 
cheap petroleum, 25; a 
great borrower, 2>2>', story 
by Dodd, 39; value of 
services, 71; plan to con- 
tinue his service, 82; 
foundations, 143. 

Roosevelt, attacks upon 
wealth, 52; folly of, 52; 
programme abandoned, 
52; on work, 53; sower 
of discontent, 53; politi- 
cal vocabulary, 54, 55; 
panic of 1907, 55; on in- 
heritance, 60; the scan- 
dal of riches, 65; on- rich 
men, 122. 

Ross report on Russia, 115. 

Russia, debacle in, 104. 



flt^ ti Et 



Sabotage, 117. 

San Francisco fire, 142. 

Savagery, reversion to, 129. 

Saws invented, 5. 

Science and wealth, 142, 
144. 

Serving or served, 50. 

Sewing machine invented, 
29. 

Sherman Law, 87. 

Ships, before American 
Revolution, 28; cost of, 
118; effect on operation, 
119. 

Shorter hours against pro- 
duction, 130. 

Skilled work required by 
wealth, 126, 

Slacking of labor, 117, 118. 

Smith, Adam, 14, 21, 30. 

Socialism, essence of, 43; 
attitude toward invent- 
ors, 43; weakness of, 44; 
in Russia, 115. 

Social legislation, develop- 
ment of, 124. 

Socrates, 23; prayer of, 125. 

Solon, 23. 

Standard Oil Co., effect of 
dissolution, 66; distri- 
bution by, 85, 

Standard of living raised 
by wealth, 113. 

Steam power, discovered, 
24. 



Steamships, first success- 
ful, 29; western rivers, 
29. 

Steel ships, first built, 31. 

Stephenson, invents loco- 
motive, 24. 

Stocks, full payment no 
protection, 69. 

Storm King Tunnel, 78. 

Strong, Dr. Josiah, labor 
in church, 75, 

Suez Canal, 143. 

Surplus, use of, 7; neces- 
sary for study, 35; to 
support labor, 72, 76, 77. 

Sze-Chuan, example, 16, 17. 



Taxation, destroyed small 
fortunes, 50; high rents, 
107; killing new business, 
108. 

Tax legislation, deliberate 
plunder, 107. 

Telegraph invented, 30. 

Telephones, invented, 31. 

Texas, blackmailing suits, 

99. 
Thinkers, poorest paid, 35. 
Tilden quoted, 73. 
Tillman on wealth, 65, 

Tools, first invented, 4; 
improved, 6, 

Transport, limitations of, 
15. 

Transportation, primitive 
methods, 16; cost of, 17; 
modern saving, 31, 

Trotsky, follower of Marx, 

114, 
Trust articles cheaper, 84, 



IN D EX 



U 

Unearned increment dis- 
cussed, 69. 

United States Steel Cor- 
poration, taxes, 107. 

Universities support so- 
cialism, 133. 



Value, ideas of, 8; of 
earth's surface, 15; of 
used lands, 28; of initi- 
ative, 45. 

Vanderbilt, made Empire 
State, 54. 

Vanderlip, on American 
shipping, 119. 

Vows of poverty, 34. 

W 

Wages, beginning of, 3; 
effect of higher, 35. 

Waste of human energy, 
27; by ignorant, Z7. 

Washington, George, 142. 

Watered coinage attempted, 
67. 

Watered stock, no such 
thing, 67] public unde- 
ceived, 68. 

Watt, James, 27, 142. 

Wealth, beginning of, 1, 
3; definition of, 13; 
under Roman Empire, 
13; days of Job, 13; de- 
fined by Smith, Mills and 
Mongredien, 14; source 



of, 14; world in 1780, 20, 
27; world in 1920, 21; 
produced in 140 years, 
21; final definition, 22; 
the creators of, 23; pro- 
duced by brains, 32; not 
produced by labor, 32; 
why controlled by few, 
36; uneconomic attacks, 
50; beneficence of, 56; 
accumulation necessary, 
61, 139; risked in gam- 
bling, 61; squandered by 
incompetents, 62; fair 
distribution, 63; use in 
distribution, 83; with- 
drawal from public enter- 
prises, 103; effect of re- 
distribution, 104; de- 
stroyed by war, 118; by 
labor, 120; like bear fat, 
139. 

Wealth accumulation prin- 
ciple, 138. 

Wealth, creation, a tri- 
umph of will, 139. 

Webster, on popular clam- 
or, 135. 

Wheat at 12 cents, 16. 

Writing invented, 24. 



Yangtse River, 16. 



LIBRARY OF CONC3Kbbb 





The Book of tl 00137420922. 

The Answer to all Red, Socialistic Propaganda 



THE THINGS 
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A Defence of Wealth 
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